Plea in Bennington School case hits snag

BURLINGTON, VT. – A Berkshire man’s agreement to plead guilty to defrauding the State of Vermont and the United States Government of millions of dollars has hit a snag.

Mathew Merritt Jr. of West Stockbridge, former president and CEO of the Bennington School, was scheduled to plead guilty to one count of health care fraud and one count of filing a false tax return in U.S. District Court on May 9.

Mr. Merritt and three other defendants are part of a $4.3 million fraud case involving the Bennington School, an institution for emotionally and socially disturbed youth.

The other defendants are former Bennington School Plant Manager (and Mr. Merritt’s son) Mathew Merritt III, former Bennington School CFO Raymond Crowley (Mr. Merritt’s son-in-law) and former Bennington School Executive Director Jeffrey LaBonte.

The government’s case alleges the defendants billed the federal government and the State of Vermont for millions of dollars of compensation, for such things as cars, oil for personal residences, salaries for family members not working at BSI (the company that ran the Bennington School until 2013) and payment of personal expenses on credit card accounts, none of which were reported on their individual tax returns.

“I think this is a relatively unusual prosecution,” said First Asst. U.S. Attorney Paul Van de Graff in comments to The Beacon, saying crimes like this weren’t common. “We hope it does send a message.”

Rather than being indicted by a grand jury, the four defendants agreed to plead guilty in exchange for lighter sentences and be charged by way of information.

“It’s not uncommon for us to do this,” said Atty. Van de Graff, adding charging the defendants by way of information occurred because the plea agreements were reached before charges were filed.

At his May 9 court date, however, Mr. Merritt’s attorney, David V. Kirby, requested his 81-year-old client’s competency be evaluated, before the plea was formally entered, requesting a 45-60 day continuance for the evaluation.

The judge subsequently granted a 30-day continuance, although the prosecution said that the issue of competency wasn’t raised when the plea deal was negotiated.

Mr. Merritt’s actions have put a hold on both his plea deal and those of his son and son-in-law. He will be appearing in court again in June.

“It might have an impact,” said Atty. Van De Graff when asked by The Beacon whether actions stemming from this competency evaluation could effect the plea agreements of the three defendants, noting they were sort of a package deal.

Mr. LaBonte’s plea is still on track to be entered, and Atty. Van De Graff expects it to be scheduled soon.

Previously, Mr. Merritt and his son ran the Valleyhead School in Lenox, an institution for girls with emotional issues that closed down in 2009 after 40 years of operation.

Mr. Merritt’s proposed plea agreement exempts him from prosecution in Vermont Federal Court for actions taken either at the Bennington School or at Valleyhead. It would not, however, prevent a state prosecution, or a prosecution in a separate federal district, if wrong-doing was discovered to have occurred at the Valleyhead School.

“I can’t comment on that,” said Atty. Van De Graff, when asked whether the government suspected similar sorts of fraud occurred at Valleyhead.

Posted by Bera B. Dunau on May 23, 2013. Filed under News. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry