Massachusetts bank exec jailed in embezzlement case

A former executive with Seamen's Bank in Provincetown will spend a year in jail after pleading guilty yesterday to embezzling $179,000, allegedly to help her mother.

A tearful and wan Kathleen Morris, 34, of Truro entered guilty pleas yesterday in Barnstable Superior Court to five charges related to the theft.
The charges included larceny over $250 by a single scheme and embezzlement from a bank. There were also 15 counts each of obtaining credit of $250 or more by false financial statements, forgery of a promissory note endorsement and uttering promissory note falsely endorsed.
The bank embezzlement charge held the stiffest potential penalty, 15 years in state prison.
Morris's full sentence, which mirrored what was sought by Cape and Islands First Assistant District Attorney Michael Trudeau, is 2½ years in a house of correction with one year to be served, five years of probation, continued psychiatric counseling and full restitution to Seamen's Bank.
Her attorney, Steven DeYoung of Hyannis had agreed to the probation and restitution, but wanted Morris to be confined at home rather than go to jail.
Trudeau said the state considered leniency in Morris's sentence because she had no prior criminal record.
Morris, who had worked for the bank for 12 years and was a commercial lending vice-president, created 15 false loan applications from 2007 to 2009 in the names of friends and family members, including her mother Jean Bodman. In her position, she was able to approve loans that were under $50,000 without further bank review. The loan applications were made between 2007 and 2009, and the payouts were deposited into accounts that Morriscontrolled, according to court statements.
The scheme was discovered during a routine bank audit after loan applicants received a letter in the mail asking them to confirm their loan, according to court statements. One person contacted that bank to say there was no loan. After conducting an internal investigation, Seamen's president John Roderick, contacted the state police.
Morris took the money because her mother had been victimized financially by a sibling who suffers from drug dependency, said DeYoung in court. "That started a process that got carried away." .
Just prior to sentencing yesterday, DeYoung tried to paint an image of Morris as an altruist new mother and career banker — "a very atypical criminal" — who suffered from depression, battled a weakened resolve and worried about her family.
Judge Gary Nickerson warned DeYoung, however, against painting too rosy a picture given some of the purchases evident in Morris's financial records.
"There was a Caribbean cruise," Nickerson said. "There are motor vehicles."
Yesterday, Morris signed a note that was handed to a representative of the Federal Deposit Insurance Corporation at the court house, confirming a "lifetime ban" for work in the financial industry. She may face civil penalties from the federal agency, according to comments made in court.
She was handcuffed at around 2:30 p.m. and led from the courtroom as family members watched, including her husband, Keith.
Keith Morris has obtained a loan against the family's primary residence at 5A Snows Road in Truro to repay Seamen's $154,000, the sum covered by the bank's insurance, according to statements made in court. A refinancing of the loan will raise the final $25,000 that Seamen's had to pay out as a deductible.