BEVERLY — A former secretary at Beverly Hospital has been indicted in a complicated "check lapping" scheme that prosecutors say netted her more than $200,000 over a four-year period.
Diane Thistle, 63, of Beverly is facing charges of felony larceny by single scheme and making false entries in corporate books in indictments handed up Wednesday afternoon by an Essex County grand jury.
The scheme came to light in April, after an audit by the hospital's former food vendor, Sodexo Inc., according to Attorney General Martha Coakley's office.
Last year, the hospital decided to stop using Sodexo for its food services, and the hospital and the vendor began settling their accounts.
Sodexo's records showed hundreds of thousands of dollars' worth of unpaid invoices for catering services at the hospital.
But hospital records showed those invoices as having been paid.
That's when Sodexo began an audit.
Check lapping is when a person, such as a bookkeeper, steals an amount of money, either cash or a check, intended to cover one expense and then uses money intended for a different expense to pay the first bill.
The hospital had been using Sodexo for cafeteria and catering services.
What investigators soon discovered is that Thistle, a 14-year employee of the hospital whose job included processing checks and cash, was taking cash that came in from the hospital cafeteria, prosecutors allege.
Then, she would allegedly take other checks from the hospital, which had been intended to be used to pay for catering, and use those to make a deposit to the cafeteria account, sometimes making up the difference with her own personal checks.
Thistle also used her access to Sodexo's cafeteria records to change the entry for that day's cash intake to an amount that equaled the catering invoice, prosecutors allege.
The scheme went undetected because Beverly Hospital records would show that the checks for catering cleared, leading the hospital to believe those bills had been paid.
Sodexo, meanwhile, didn't notice the missing cafeteria money because it was getting checks that it thought were cafeteria revenue.
When the audit turned up the discrepancies, the hospital and Sodexo contacted the attorney general, prosecutors say.
Thistle is scheduled to be arraigned in Salem Superior Court on July 22.
Thistle, who has not been arrested, will be sent a summons to appear in court, said Harry Pierre, a spokesman for Coakley.
Thistle could not be reached last night for comment.
The case is being prosecuted by the attorney general's corruption and fraud division. Pierre said the hospital and Sodexo cooperated fully in the investigation.
Thistle's indictment is not related to that of former Beverly Hospital Associate Vice President Paul Galzerano, also indicted Wednesday in a kickback and bribery scheme.
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