According to a story in the Salisbury (Maryland) Daily Times, the Maryland State Education Association conspired to hide the embezzlement of nearly a half-million dollars from its members because “because of (the) potential impact on membership and loss of members” according to a insurance document the union filed. MSEA is an affiliate of the National Education Association.
The embezzlement was all done by one person, Denise Owens, a special education teacher at Stephen Decatur Middle School. She was also the treasurer the treasurer of the Worcester County Teachers Association. Owens was also a gambling addict who couldn’t stop playing the slots in nearby Delaware. Starting in 2006, she began lifting funds from the treasury to cover her losses.
The total amount embezzled topped $433,000. Eventually, the union found out about it and, rather than reporting the crime, covered it up, according to Daily Times reporter Brian Shane:
[S]tarting in April 2006, Owens wrote herself nearly 200 unauthorized checks, in amounts ranging from $150 to $6,000. She also wrote checks to friends and co-workers.
When she was caught in March 2009 by the Maryland State Education Association, the state teacher’s union did not report Owens to police, but instead arranged for Owens to repay the debt.
MSEA ordered the comprehensive forensic audit after learning that Owens, then going by her former married name of Denise Tull, had stolen from union funds earmarked for state and national union membership dues. No funds from the local Worcester County Teachers Association were stolen.
Only the MSEA, Owens, and the former president of the Worcester County Teacher’s Association were in on the deal; none of the WCTA membership was ever informed.
“I think the cover up of that theft, and the lies to the teachers, is far worse morally than Denise Owens having a severe gambling problem,” said Steve Rakow, lead prosecutor for the Worcester County State’s Attorney’s Office, at the Feb. 19 sentencing (of Owens).
MSEA filed an insurance claim stating it suffered a $236,545 loss due to “local elected treasurer dishonesty.” The claim paperwork, which was filed by prosecutors among the court documents, offers space for the claimant to explain how authorities may have been alerted to the incident.
In this case, the authorities were not brought in.
“Not reported because of potential impact on membership and loss of members,” the claim document states.
A police investigation began Feb. 27, 2012, after The Daily Times reported the alleged embezzlement. Court documents say by March 1, investigators learned of the secret meeting and the subsequent audit.
Authorities have said the lack of cooperation from MSEA made it very difficult.
“A select few were very uncooperative during the investigation,” said Lead investigator detective Kyle Clark of the Maryland State Police. “They just weren’t willing to talk a lot about what went on.”
Eventually, through subpoenas and court orders, police were able to locate the WCTA’s insurance company, National Union Fire Insurance Co. Among the insurance company records was Owens’ written confession from June 2009.
By August 2012, investigators were ready to indict Owens on theft scheme charges. As a result, the school system placed her on indefinite administrative leave. In January, she announced that she would retire from teaching effective Feb. 1.