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Beaver County township's ex-secretary charged in $190K theft

Jason Cato
| Tuesday, March 18, 2014, 9:09 a.m.

More than $190,000 in missing cash deposits might have gone unnoticed if a small township in southern Beaver County hadn't started a long-overdue search to hire a full-time manager.

Prosecutors charged former Harmony secretary Lyla Lynn Swan, 57, with 17 felony theft counts dating from 2006 through 2013 for allegedly using her post to pilfer residents' sewer and trash collection bill payments.

Swan could not be reached for comment, and no one answered the door at her two-story, red-brick Ambridge home.

“That was a business decision, period,” Glen Angus, board of commissioners president, said of a vote last year to abolish the secretary position Swan held for 30 years. “Hiring a manager is something we should have done a long time ago.”

Township officials in July hired Virginia Finnegan, a certified public accountant, as interim manager. Interviews are scheduled this month, with five finalists for the job.

Finnegan, who is out of the office until next week, noticed cash payments from residents for sewer and garbage collection were not deposited in township accounts for several years, according to a criminal complaint filed on Friday.

A review uncovered irregularities in four of eight bank accounts, the complaint stated. Harmony police Chief James Essek; the accounting firm Cottrill Arbutina & Associates of Beaver; and Joseph Fennych, chief county detective, investigated.

Fennych's complaint noted discrepancies:

• $9,075 missing from the sewer construction fund account for 2007 tap-in fees;

• $150,000 or more missing from another sewer fund;

• $20,251 missing in garbage collection cash payments;

• $10,694 missing from petty cash.

In all, authorities accused Swan of diverting more than $190,020 intended for deposit. Harmony's annual budget is about $1.5 million.

An assistant township secretary told investigators she documented payments in a ledger and placed cash and checks in a metal box, which went into a locked metal cabinet inside a locked closet in Swan's office at the end of each day. The assistant said she noticed less cash sometimes would be in the box the next day, the affidavit stated.

On July 16, a township official told Swan to deposit cash and check receipts into a township bank account. All checks were deposited, but $784 in cash was missing, the affidavit stated.

Township officials alerted police.

“Any time you have a situation like this, it's upsetting. It's a lot of money,” Angus said. The township is partially insured and should recoup some of the losses. “It's had an impact. We need to rebound from here.”

Essek, police chief for less than a year, started working in the department 31 years ago — just after Swan was hired. He said he had no clue anything was amiss with township accounts. Cash accounted for about 8 percent of all payments, he said the investigation revealed.

“A lot of our residents are elderly, and a lot of them still pay cash,” Essek said.

Harmony has about 3,400 residents and 1,400 homes, many of them built close together on quiet hillside streets above Ambridge and the Ohio River about 30 minutes northwest of Pittsburgh.

Andy Barnes moved to Harmony in 1999. He said he paid some sewer and garbage collection bills with cash, but typically pays by check.

“This is a small municipality. They could have done a lot more with that money,” said Barnes, 45, a retired state law enforcement official who works as an insurance agent. “You'd think they would have caught it in an audit.”

Annual audits have not been completed since 2008, Essek said. The affidavit noted auditors and the interim manager reported Swan was uncooperative, evasive and canceled meetings related to the financial investigation.

“We now see why,” said Essek, who said Swan made about $20 an hour. “She was the accounts received and accounts payable.”

Essek in December questioned Swan at her house. Asked about the missing cash, Swan responded, “I don't know” and “I don't care,” the affidavit stated. She told Essek she knew the money was missing but she had not deposited it into another account, the record stated.

Essek declined to say whether investigators know how Swan spent the money. The money has not been recovered.

“That would all be speculation,” Essek said.

A preliminary hearing is scheduled for April 15 before Magistrate James F. DiBenedetto in Aliquippa. State and federal court records show no prior criminal cases against Swan.

All receipts were recovered for people who made cash payments, Berosh said. “They will not be billed a second time.”

Jason Cato is a Trib Total Media staff writer. Reach him at 412-320-7936 or

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