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Little Egg Harbor, Ocean County

FULL REPORT: Auditor’s Investigation Shows How Freeholder’s Daughter Stole Taxpayer Money in Little Egg Harbor

In New Jersey, politicians are often known for their ability to separate taxpayers from their hard-earned income, but Dawn Marie Kelly, the daughter of Ocean County Freeholder John P. “Jack” Kelly took things a step further while she was an employee of the Little Egg Harbor tax collector’s office, which she previously faced charges over. OCP has obtained the full auditor’s report detailing how she did it – and how she got caught.

A never before published investigation report prepared by Kevin Frenia of auditing firm Holman, Frenia & Allison obtained from a source by Ocean County Politics is shedding some more light into the incident that saw the daughter of an Ocean County freeholder steal cash property tax payments while working at the Little Egg Harbor tax collector’s office several years ago.

With Dawn Kelly’s name being back in the headlines last week because of her father’s surprising defense of the Affordable Care Act involving Ms. Kelly (better known as “Obamacare”) at a recent freeholder meeting, several readers have asked about the details of her theft of taxpayer monies, and the report actually answers a lot of questions, such as just how much was stolen and what was actually paid back by Kelly, who would later accept a plea deal to charges of theft by unlawful taking in connection with the incident.

The total cost of Dawn Kelly’s thefts

“Our investigation revealed that there were questionable circumstances surrounding 63 transactions that were conducted between November 15, 2011 through and including July 5, 2012,” Frenia wrote in the report he prepared for Little Egg Harbor Township. “These questionable circumstances pertained to transactions involving third party lien redemptions, regular tax payments and cost of sale fees and implicated the DTC [Kelly] in a theft of the taxes and fees that were paid to LEHT in these transactions.”

The thefts first became apparent to Dayna Wilson, the tax collector of Little Egg Harbor, on December 9th, 2011. Frenia’s report noted that Wilson noticed that one of her office’s cash drawers “looked light” and was missing money. After she counted the money in this drawer, she found it to be short by $46.30. Following this incident, the report describes additional instances with varying smaller amounts identified by the tax collector’s office.

One instance identified on the report came on July 17th, 2012 when a taxpayer came into the tax office after they were received property tax lien notifications on a tax bill, despite the taxpayer having recently made a $4,322.36 cash property tax payment on June 13th of that year to redeem the lien. Following this, the tax collector’s office staff began checking data against computer records and began to notice discrepancies.

“Tax Clerk 1 [k]new this was not accurate because she remembered handling this transaction for taxpayer l and remembered giving him a receipt,” the report noted.

“Although Tax Clerk 1 took taxpayer l’s cash payment and issued him his receipt, the DTC was the employee who would have handled the remainder of the transaction, which included making the necessary computer entry to redeem the lien and then preparing the bank deposit. Taxpayer 1 was then contacted by phone and a message was left for him, asking him to return to the TCO the next day with his receipt.”

They would later determine that Kelly, a deputy tax collector, was pocketing some of the cash payments for herself to support her drug habit, while altering records in an attempt to conceal the thefts.

More details began to come to light following that incident, as the tax collector would later note additional red flags after querying the office’s computer system. She noticed an “unusual” amount of lien redemptions taking place, along with the fact that 16 files dealing with liens were missing.

The report said that Dawn Marie Kelly’s departure for a “drug rehab program” on July 6th, 2012 created some “suspicion” for Little Egg Harbor Tax Collector Dayna Wilson in light of the discrepancies. July 5th, 2012 – one day before she entered the drug program – was Kelly’s last day of work in town hall. Her boss had “no idea” that she would be suddenly departing for rehab, according to the report. At that point, Wilson “…suspected that the issue regarding taxpayer 1 might be a theft and she suspected the DTC [Dawn Marie Kelly of committing the theft.”

Following Kelly’s thefts, she repaid some, but not all of the proceeds, as the Frenia report noted.

“Our investigation into this aspect of the overall theft scheme employed by the DTC revealed that she stole 23 regular tax payments,” he concluded. “These payments were paid in cash and totaled $20,113.76, of which $19,283.16 was repaid. The difference of $830.60 represents a regular tax payment made by taxpayer 2, in cash on 5/10/12 that the DTC stole. The DTC repaid these stolen funds between June 29, 2012 and July 5, 2012.”

Read the full report below:

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