Officer Pleads Guilty to Theft

A financial officer of Harvard Magazine pled guilty to embezzling $190,000 from the magazine between 1988 and 1994, according to court records obtained yesterday.

Michelle Surette, 49, of Medford, formerly Michelle Pittman, received a suspended sentence of 2 and 1/2 years in prison and is required to perform 500 hours of community service and to make a partial restitution, according to the court documents.

Boston Globe columnist Alex Beam yesterday reported the contents of an October 1994 meeting of the board of incorporators of the magazine, which is distributed every other month to 220,000 University alumni.

According to the magazine's Publisher Laura Freid, Surette was fired immediately after Freid learned she had been misusing corporate credit cards over an eight-year period.

Two magazine staffers said yesterday Surette had also taken funds from other sources, but Freid declined to comment on those allegations.

A warrant filed by filed by Lt. John F. Rooney of the Harvard University Police Department charges that Surette "stole cash, merchandise."

Freid said most of the missing funds were repaid by the Chubb insurance company thanks to a policy she had taken out three years earlier. The District Attorney's office and the insurance agency were both actively pursuing Surette's case, according to Freid.

Freid said yesterday Surette's crime was an example of the dangers of placing too much financial control in the hands of a single employee.

"The issue in my mind is not who is to blame, the individual has already admitted her guilt and is serving her time," Freid said. "We all have to focus on ways that we can improve crimes prevention."

Freid said she has balanced financial controls with a limited number of staff in oversight positions. The multi-million dollar publication has 20 employees and receives 20 percent of its operating income from the University, according to the incorpora- tors' report.

Managing Editor Christopher "Kit" Reed said that voluntary alumni donations make up one third of the magazine's revenues. Advertising revenues are also substantial; the November-December 1994 issue contained approximately $350,000 of advertising revenues.

Minutes of the meeting prepared by Reed reveal only scant details, sandwiched between the hiring of an advertising manager and a report of advertising sales.

"Freid had noticed irregularities in financial reports and items on corporate credit cards that should not have been there," Reed wrote. "An internal audit revealed that the comptroller had embezzled some $150,000 during her five years of employment."

The warrant charges Surette with engaging in a "larcenous scheme from 1988 to 1994 [to] steal or embezzle funds from Harvard Magazine and Harvard University approximating $190,000."

Surette, who according to court documents now works at Body Works as a masseuse, could not be reached for comment yesterday.

Freid said yesterday the magazine has reorganized its financial structure by replacing the comptroller's position with that of a chief financial officer and distributing check signing privileges.

But at the board meeting at which the embezzlement was announced at least one board member, attorney Casimir de Rham '46, wondered why the extra spending had not been caught in an audit.

The Boston firm Coopers & Lybrand performed an external audit of the magazine's financial statements each year, according to Michael J. Barone, director of internal audit.

Barone said the University also oversees the magazine's spending, but he declined to give specifics on how Harvard might have acted to prevent the theft.

"The internal audit looks at the system," Barone explained. "Compliance, protection--which we call safeguarding--effectiveness and efficiency, those are the kind of objectives we have."

Daniel Steiner '54, a member of the magazine's board of incorporators, said some financial oversights are inevitable in a large institution.

"Some embezzlements are going to escape notice in any organization," Steiner said. "The cost of putting systems into place which would catch everything right away would be enormous.

Managing Editor Christopher "Kit" Reed said that voluntary alumni donations make up one third of the magazine's revenues. Advertising revenues are also substantial; the November-December 1994 issue contained approximately $350,000 of advertising revenues.

Minutes of the meeting prepared by Reed reveal only scant details, sandwiched between the hiring of an advertising manager and a report of advertising sales.

"Freid had noticed irregularities in financial reports and items on corporate credit cards that should not have been there," Reed wrote. "An internal audit revealed that the comptroller had embezzled some $150,000 during her five years of employment."

The warrant charges Surette with engaging in a "larcenous scheme from 1988 to 1994 [to] steal or embezzle funds from Harvard Magazine and Harvard University approximating $190,000."

Surette, who according to court documents now works at Body Works as a masseuse, could not be reached for comment yesterday.

Freid said yesterday the magazine has reorganized its financial structure by replacing the comptroller's position with that of a chief financial officer and distributing check signing privileges.

But at the board meeting at which the embezzlement was announced at least one board member, attorney Casimir de Rham '46, wondered why the extra spending had not been caught in an audit.

The Boston firm Coopers & Lybrand performed an external audit of the magazine's financial statements each year, according to Michael J. Barone, director of internal audit.

Barone said the University also oversees the magazine's spending, but he declined to give specifics on how Harvard might have acted to prevent the theft.

"The internal audit looks at the system," Barone explained. "Compliance, protection--which we call safeguarding--effectiveness and efficiency, those are the kind of objectives we have."

Daniel Steiner '54, a member of the magazine's board of incorporators, said some financial oversights are inevitable in a large institution.

"Some embezzlements are going to escape notice in any organization," Steiner said. "The cost of putting systems into place which would catch everything right away would be enormous.