CONCORD — A former bookkeeper of the Lebanon chapter of the Protective and Benevolent Order of Elks fraternal organization has pleaded guilty to siphoning money from the group and must pay restitution, but he will not spend time in prison.

Michael Wood, of West Fairlee, entered a guilty plea to a single charge of bank fraud in U.S. District Court in New Hampshire on Feb. 6, federal court records show.

The guilty plea arises out of an indictment federal prosecutors brought against Wood at this time last year, alleging he manipulated Elks’ funds through a “check-kitting” scheme at two banks to enrich himself.

Wood’s guilty plea stipulates a prison sentence of time served and orders restitution paid to the Elks in the amount of nearly $24,300, plus three years of supervised release with eight months of confinement served via home detention, according to the plea agreement filed in the docket.

Because Wood was released on conditions the day of his arraignment at the federal courthouse in Concord on Feb. 10, 2022, he effectively has served his home confinement and will avoid any time behind bars on the fraud charge, which carried the potential for a 30-year prison sentence and up to a $1 million fine.

Judgment has yet to be rendered on the plea agreement, according to the docket, although court approval is typically a formality when parties submit a negotiated plea. Wood’s criminal trial was scheduled to begin Wednesday.

Heather Cherniske, the New Hampshire federal prosector handling the case, and Dorothy Graham, Wood’s court appointed federal public defender, did not respond to messages asking for comment on Tuesday.

Wood also could not be reached for comment.

Margo LeHaye, interim exalted ruler of the Lebanon Elks chapter, declined to comment when reached by phone on Tuesday.

The plea agreement closes — at least as a federal criminal matter — a painful chapter for the Elks lodge, which alleged in a separate civil lawsuit brought against Wood that his misappropriation of funds threw the philanthropic social club into financial turmoil.

Just over a year ago, federal prosecutors indicted Wood, 54, and charged him with defrauding two banks through when he worked as manager of the Elks lodge on Heater Road in Lebanon.

Wood allegedly transferred funds from an Elks account at the former Lake Sunapee Bank — now Bar Harbor Bank & Trust — into a bank account he controlled at Merchants Bank, the indictment claimed.

From August 2016 to February 2017, Wood transferred f in amounts that exceeded what was available in the sending Lake Sunapee Bank account, thereby artificially increasing the balance in the receiving Merchants Bank account, in a scheme known as kiting, the plea agreement detailed.

(Check-kiting is a form of bank fraud that involves transferring overdrawn funds from one bank account to another bank account, which causes the balance in the receiving account to appear larger than it legitimately should be and thereby making available access to money that’s not really there).

Before the artificially inflated Lake Sunapee Bank checks would clear in the Merchants Bank account, Wood would transfer the funds, less the inflated amount back, back into the Lake Sunapee Bank, using the float time and discrepancy in account balances to funnel the fake surplus into his own pocket, according to the plea agreement.

Inititially, Wood attempted to dissuade the Elks from investigating, according to the plea agreement.

“When the Elks first confronted (Wood) about the situation on or about Feb. 17, 2017, (Wood) told the Elks officer not to go to the bank and he would handle the situation,” the plea agreement said.

The total loss to Lake Sunapee Bank in the scheme totaled $24,298, prosecutors said.

Filings in the case suggest Wood’s involvement in deeper financial fraud at his former employer.

“While Mr. Wood is charged with ‘check-kiting’ and the indictment identifies the specific victim (the bank) of that scheme, the discovery suggests a larger fraudulent scheme involving the Elks lodge of Lebanon,” Wood’s defense attorney wrote in a motion assented to with prosecutors filed last summer seeking postponement of the trial date for further preparation.

And the federal indictment was not the first time that a red flag had been raised claiming Wood took the club’s money.

In June 2018, 16 months after the Elks Lodge reported to the Lebanon Police Department that an unexplained loss of money had thrown the social club into financial turmoil with unpaid property taxes dating back years, the Elks sued Wood in Grafton Superior Court alleging that he had “over the course of several years … created fraudulent records and diverted to his own use funds due and owing to the Elks.”

The Elks’ civil suit alleged a complicated real estate leasing transaction involving Elks property which Wood negotiated on behalf of the Elks but on financial terms beyond what the board had authorized. Wood then “misappropriated ... payments to himself,” the Elks alleged in their lawsuit.

Wood never replied to the Elks’ allegations and the court entered a default notice the following November in the Elks favor.

Contact John Lippman at jlippman@vnews.com.

]]>