MONTPELIER -- A state employee allegedly crafted an elaborate check-cashing scheme and embezzled at least $75,000 from the state, Gov. Peter Shumlin announced Friday.

State police Friday arrested Office of Risk Management employee Lisa Peduzzi and charged her with multiple charges of Embezzlement by a Public Official.

So far investigators have uncovered 19 incidents in 2013 and 2014 in which Peduzzi, a claims investigator who worked in the risk management office of the Agency of Administration, allegedly wrote state checks to buy cars, boats, guitars and jewelry.

Lisa Peduzzi of Plainfield, claims examiner for the state s office of risk management, is accused of embezzling nearly $75,000. (Police photo)
Lisa Peduzzi of Plainfield, claims examiner for the state s office of risk management, is accused of embezzling nearly $75,000. (Police photo)

She also allegedly paid her Plainfield property tax with state funds, Shumlin said.

Officials held a last-minute news conference Friday afternoon to announce the arrest. They also executed a search warrant at her home.

"There is nothing more disappointing or infuriating to me than a state employee who takes advantage of the public trust and steals taxpayer money," Shumlin said.

Police emphasized that this is only the beginning of a lengthy probe into her schemes. Her embezzlement scheme likely stretches back at least as far as 2009, police said. They believe Peduzzi acted alone.

"We want to take the time to make sure it's done right and make sure we get every cent back that's due in restitution," said Public Safety Commissioner Keith Flynn.


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Flynn said she may be arraigned Monday in Barre. Attorney General Bill Sorrell's office will prosecute the case, Shumlin said.

Peduzzi allegedly sold some items she bought. Anyone who has bought or sold something from her should contact the state police, police said.

"Apparently she was an Ebay-er," Flynn said.

The Office of Risk Management hired Peduzzi in September 2006 from the private sector, according to Kate Duffy, the commissioner of the Department of Human Resources. Her annual base salary was $49,483.00. She resigned April 2 and is not being paid, according to Duffy.

Police have not identified a motive. Peduzzi is in state custody at the Chittenden County Correctional Center.

Her scheme was sophisticated. Peduzzi's job was to pay out claims to people who filed them with the state, officials said. To steal money, she would create false claims, complete with forms and receipts, issued to people she wanted to pay.

All of the checks were for $15,000 or less, officials said.

When police followed up on the claims, many claimants said they had never been to Vermont, police said.

The claims were for hitting potholes or bridge abutments, and were issued in amounts small enough that they did not create a suspicious spike in claims.

Investigators were tipped off to Peduzzi's scheme earlier this month after she tried to buy a guitar from a man in Michigan, who got suspicious when she wanted to pay with a state check.

As a result of this case, state officials want to recover this money and ensure "such schemes have less success in the future," Shumlin said.

They ended a policy allowing an employee to singlehandedly issue checks for less than $15,000. Shumlin said it appears that Risk Management was the only office with that policy.

State Auditor Doug Hoffer plans to conduct an internal controls review, Hoffer said at the news conference.

The review will ask additional questions about payment outside the state's central payment system and provide extra training and oversight regarding internal controls reporting, officials said.

The state has an insurance policy to cover any lost money that might not be able to be collected, the governor said.

The Office of Risk Management this fiscal year was transferred from the Department of Buildings and General Services to the Secretary of Administration, Duffy said.

The statute of limitations for embezzlement is six years, Flynn said, but they will look to see if her schemes go back further than that.

In February 2013, a state employee named Lisa Peduzzi commented on a VTDigger story about a clash between the state employees union and the state over whether some employees providing services after Tropical Storm Irene are eligible for double pay.

Identifying herself as a union member, Peduzzi said "This money grab attempt at the taxpayer's expense is morally reprehensible and fiscally irresponsible. These employees were paid for their time once already."

Peduzzi is scheduled to be arraigned on at 12:30 p.m. Monday, April 21 at the Washington County Superior Court Criminal Division.