BEVERLY — A Beverly woman who pleaded guilty to stealing $232,626 from Beverly Hospital in 2011 repaid just $1,800 of that amount over her decade on probation, which concluded on Tuesday. 

Diane Thistle, 74, of 502 Manor Road, told the court in an affidavit that she gets by on a little more than $1,350 a month in Social Security benefits and couldn't afford to make the payments she'd agreed to back at the time of her sentencing. 

Thistle's probation in the case, in which she pleaded guilty to felony larceny by single scheme and false entries in corporate books, was set to end on Tuesday, 10 years after she served part of a seven-month jail term in the case. 

But she still owed more than $230,000 in restitution, her court-appointed lawyer, Cole Cagle, acknowledged in a motion seeking to terminate her probation despite the remaining amount, which she has no ability to pay. 

Cagle cited the Massachusetts Supreme Judicial Court's decision in the case of a Salem woman, Kim Henry, who was facing a significantly smaller restitution order payable to Walmart, where she had worked until her arrest on charges she would "free bag" items for friends. The court found that a judge cannot extend the length of probation when someone violates an order of restitution solely because they cannot afford to pay it. 

The decision, which involved the case of a middle-aged retail store clerk left homeless and essentially unemployable by her conviction, has been cited numerous times since in cases involving far higher amounts of money. 

On Thursday, a woman who pleaded guilty last year to stealing more than $157,000 from a Manchester-by-the-Sea couple is due in court for a hearing to determine her ability to pay the restitution ordered at her sentencing. The court has labeled the proceeding as a "Henry hearing."

Thistle, meanwhile, cited several medical conditions, which left her with medical bills, as well as her regular monthly expenses. She lives in a subsidized apartment but had a number of other expenses, according to court papers. 

Because of the restitution order, Thistle was also never required to pay the $65 monthly fee that others on probation are ordered to pay (unless they can show financial hardship). 

After hearing from her attorney, Judge Kathleen McCarthy Neyman granted the request to terminate Thistle's probation and canceled the restitution order.

Thistle had been doing something prosecutors called "check lapping," in which she pocketed cash that came into the cafeteria, which was supposed to go to the vendor that ran the cafeteria, Sodexo. Then, when various departments would submit checks for catering services at the hospital, she would use those checks to pay Sodexo. 

The original case was prosecuted by the Attorney General's office, which learned of the thefts during a separate investigation into a former vice president at Beverly Hospital, Paul Galzerano, who subsequently pleaded guilty to soliciting bribes and kickbacks from multiple hospital contractors, a scheme that netted him roughly $500,000, during a hospital renovation and expansion project. 

At the time of his sentencing, in 2012, Judge Howard Whitehead imposed an 18-month sentence but ordered Galzerano to perform community service rather than pay any restitution, calling it "futile." 

The following year, however, a different judge lifted the order to perform community service after Galzerano claimed that his new job would keep him too busy for it. 

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at or on Twitter at @SNJulieManganis. 


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