A former branch manager of a Massachusetts bank that was bought by Lexington Savings Bank has been charged with embezzling $265,000 from the bank over four years.
The New England Bank Fraud Task Force last week charged Catherine J. Foley, 54, of Woburn, Mass., with two counts of embezzlement and one count of falsifying bank records to hide the missing money.
Ms. Foley faces a maximum of 20 years for the embezzling charges and a maximum of 30 years for falsifying the records.
The former employee of Suburban National Bank allegedly removed a total of $185,000 in cash periodically from the vault at the Woburn branch from 1986 to 1990. Ms. Foley is also accused of taking about $80,000 from a safe deposit box using a duplicate key she had made.
After Suburban was bought by $400 million-asset Lexington in December 1993 for $4.8 million, Ms. Foley, then a vice president of Lexington, allegedly overstated the amount of cash in the vault by about $185,000.
The apparent embezzlement was discovered during a routine audit in April 1994, two months after Suburban was converted to Lexington's computer systems.
The missing funds amounted to less than 1% of Lexington's capital, and the bank has been reimbursed in full by its insurance company, said Douglas R. Keyes, senior vice president and chief financial officer of Lexington.
The Bank Fraud Task Force is still investigating Suburban and Lexington, according to a statement released late last week.
The charges come as Lexington prepares for a merger of equals with Main Street Community Bancorp of Waltham, Mass., which will create a new holding company, Affiliated Community Bancorp, with $794 million in assets.
The investigation will not affect the merger, Mr. Keyes said.
The task force consists of the U.S. Attorneys' offices for each of the New England states, the fraud section of the Justice Department's criminal division, the civil and tax divisions, and the Federal Bureau of Investigation, Internal Revenue Service, and Secret Service.