Big changes have been taking place behind the scenes in Southold Town Justice Court this year, aimed at preventing the recurrence of the embezzlement that led to the conviction of a longtime court employee earlier this year, who pleaded guilty to stealing more than $231,000 in bail monies, fines and other cash.
The town created the new position of justice court director and hired Leanne Reilly to fill the $80,000 per year post beginning Jan. 5. Reilly, who answers to the supervisor rather than the town justices, is charged with oversight and management of the court’s operations.
Since taking the post, Reilly has pored over court records and files housed in the tiny, cramped quarters in the modular unit that serves as the court’s office. It is attached to the back of town hall, adjoining the meeting room that doubles as a courtroom when court is in session.
Reilly, who served as court director in the Village of Westhampton Beach prior to coming to Southold, has implemented a host of changes to the court’s filing system, its computers, the assignment of duties among the clerks, and the way monies are handled and tracked.
The way things had been done when senior court clerk Christine Stulsky ran the office is what allowed Stulsky’s theft of so much money to go undetected for several years, Reilly said.
Stulsky, a 34-year town employee was arrested and charged with grand larceny, defrauding the government and official misconduct in a five-year embezzlement scheme in which she stole more than $231,000 in bail monies and other cash from the justice court’s coffers. The senior clerk resigned from her post upon her arrest in March 2014.
Stulsky, 65, pleaded guilty in January 2015 to grand larceny and in March was sentenced to six months in jail and five years probation under a plea deal that requires her to make full restitution to the town. She has been released from jail. So far, she has paid back $$111,904.76, Reilly said last week. The balance of more than $119,000 is to be paid back in monthly installments during the rest of her probation period.
Most of the stolen funds were bail monies deposited with the court to guarantee that people charged with crimes return to court to answer their charges, Reilly said. Stulsky had been the only staff member to handle the bail deposits, which were often in the form of cash. Stulsky often kept the cash instead of depositing it into the appropriate bank account. She also had control of the receipts, the computer where deposits and payments were entered, and the checkbook.
Auditors disapprove of one person having control over that many steps in the process for handling monies and the court’s audit reports cited that deficiency more than once.
The system in place allowed Stulsky to manipulate paper and computer records to make it appear as though the money was being handled properly — to reflect deposits that were not actually made to the bank account and checks for the return of bail monies to defendants that were never actually issued.
An investigation by forensic auditors and investigators in the Suffolk County district attorney’s office uncovered the extensive irregularities, beginning in early 2009.
Reilly was left with the tasks of figuring out exactly what had happened and devising and implementing new systems to prevent a reoccurrence.
Bail deposits were the main source of stolen funds, so that’s where Reilly and the court staff started their work. Reilly found that when people tried to get their bail returned to them after their cases were concluded, their requests were often unfulfilled.
“Much of what we’re talking about was relatively small amounts of money that, over time, added up. But the people depositing the bail, after requesting it back once or twice, would abandon it,” Reilly said. The court’s records were altered to make it appear as though the monies were returned when they were not.
There were “drawers full of bail files” where bail was not returned, Reilly said. “People asked but their money was just not returned.”
Now that the bail files have been combed over and sorted out — and significant restitution funds are on hand — bailors are receiving notices from the court to pick up their deposits. Bail not claimed after six months is turned over to the town, which by law holds the money for six years. If it is unclaimed in that time, it is forfeited, Reilly said. The court, which started sending out notices to bailors in April, just turned over to the town nearly $24,000 in unclaimed bail.
Reilly has segregated among different staff members all duties involving the handling of monies received, receipts issued and checks disbursed are now segregated among different employees, so there are built-in safeguards against one person pilfering funds, Reilly said.
Moreover, everyone on the four-person staff is cross-trained to handle all the duties in the court office and the staff members rotate in those duties every day throughout the week, Reilly said.
The court got new computers and desktop scanners through a state grant and new software that has better built-in security. All receipts are now computer-generated and cannot be manipulated.
The new justice court director is “implementing audit findings that have been made for years but were never implemented,” Supervisor Scott Russell said.
“With the help of [Justice] Bill Price, the town board has taken action to right the ship.”
Price said he wants the public to have confidence that the court takes the matter very seriously and is working hard to reconcile all accounts and make sure nothing like the previous theft ever happens again.
“It’s also important for people to understand that the other staff members here were not involved and had no knowledge of what was going on,” Price said in an interview last week.
The process of getting everything “squared away” is made more difficult by the court’s cramped office space, which is piled high with files, filing cabinets and boxes of files. The tiny conference room, where Reilly can spread out files on a small table, also serves as a filing room, an office for Fishers Island Justice Louisa Evans and a jury deliberation room, as needed.
Once all files are orderly — she is conducting a complete file audit, going back to every file in the court to make sure data is entered correctly in the computer system — “we are going to request that every account be audited,” Reilly said.
“We need a new justice court facility,” Russell said. “There’s no getting around that.” Everything short of that will only be a temporary patch, he said.
Sharing the town hall meeting room with other town committees and boards limits how often and how long the court can be in session. It also presents serious security concerns. The court now has a metal detector and court officers, but there are other issues that must be addressed.
Council members Jill Doherty and Jim Dinizio are looking at alternatives for housing the court facilities.
“We’ve been exploring different options with respect to housing the court. At this time, nothing is off the table,” Dinizio said. “We have considered using the Peconic school and the recreation center on Peconic Lane, and also expanding the current space at Town Hall,” he said. The process is ongoing.