Brunswick fraternal group fears it will have to disband after embezzler cleans out bank account

Philip Steadman, Fred Goldrup and Michael Sanborn stand outside the Knights of Pythias lodge in Brunswick. Lodge members say they may have to shut the doors after 27-year-old Michael Peterson of Lewiston allegedly embezzled more $62,000 from the fraternal organization.
Philip Steadman, Fred Goldrup and Michael Sanborn stand outside the Knights of Pythias lodge in Brunswick. Lodge members say they may have to shut the doors after 27-year-old Michael Peterson of Lewiston allegedly embezzled more $62,000 from the fraternal organization.
Posted Aug. 22, 2012, at 9:42 a.m.
Last modified Aug. 22, 2012, at 5 p.m.
Fred Goldrup, 78, a fourth-generation Knight of Pythias who serves as the prelate of the Brunswick lodge, said Monday that had members known that Michael Peterson was a registered sex offender, they never would have allowed him to join the group, which is based on the principles of friendship, brotherhood and charity.
Fred Goldrup, 78, a fourth-generation Knight of Pythias who serves as the prelate of the Brunswick lodge, said Monday that had members known that Michael Peterson was a registered sex offender, they never would have allowed him to join the group, which is based on the principles of friendship, brotherhood and charity.

BRUNSWICK, Maine — The indictment earlier this month of a Lewiston man accused of embezzling $62,000 from the Knights of Pythias in Brunswick has left the group — founded on the principles of friendship, brotherhood and charity — reeling with betrayal. With just $6,200 in the bank, group members wonder if this year might be their last.

Michael Peterson, 27, of Lewiston was indicted on Aug. 10 by a Cumberland County grand jury on one count of Class C theft after allegedly stealing the funds between June 2009 and August 2011. He had been keeping the books for the fraternal organization.

Established in 1864, the Knights of Pythias was founded on the principles of friendship, brotherhood and charity, secretary Michael Sanborn said Monday from the lodge on Turner Street.

The Brunswick Lodge has 24 members. Dues are $18 a year. They meet every Monday evening to see friends and often sponsor fundraisers such as the Christmastime auction which this year benefited the Ronald McDonald House.

“This type of an organization — everybody you meet is friends with you,” Sanborn said.

So the members feel particularly betrayed that Peterson — who they trusted with their money and friendship — allegedly betrayed both and may cost them their lodge.

As members aged — Gerald Teatreault is 96 — another lodge member recommended Peterson as secretary and treasurer because “it would be nice to have a nice young guy to keep the lodge going,” Sanborn said.

Fred Goldrup, 78, a fourth-generation Knight who serves as prelate of the lodge, said Monday that had the members known Peterson was a registered sex offender, they never would have allowed him to join.

On Jan. 16, the Knights of Pythias reported to Brunswick police that they suspected that Peterson had been embezzling funds, Brunswick police Capt. Mark Waltz said.

Detectives spent several months collecting bank records and reviewing meeting minutes, which Waltz said “should contain authorized expenditures.”

They learned that $62,000 allegedly had been removed without authorization from the accounts.

Police interviewed Peterson in July and discovered he was on probation after having pleaded guilty in Portland Superior Court in January 2007 to gross sexual assault, Waltz said.

He was summoned in July by his probation officer for a probation violation and a judge ordered him held without bail “based on the severity of the theft,” Waltz said.

In 2005, the Knights sold their former lodge, the brick building at the corner of Maine and Pleasant streets that still bears the name of the organization, for $500,000, Sampson said. They purchased the Turner Street building for $250,000 and after renovations had “a little over $300,000” in the bank.

While Peterson was indicted in connection with the theft of $62,000, according to Waltz, Sanborn thinks he took more, “but I can’t prove it.”

According to Sanborn, Peterson moved the funds among accounts and CDs in three banks.

“He was drawing out cash sometimes three or four times a day,” Sanborn said. “He took the books and bank statements home with him. We weren’t privy to them.”

Then Peterson stopped coming to meetings, Sanborn said, “and wouldn’t answer our calls.”

When Sanborn took over as secretary, he received a letter from the bank notifying him of an overdraft.

“I said, ‘We can’t be. We’ve got over $100,000,’” he said. But the bank official informed him the account was $96 overdrawn.

Today, the Knights account contains $6,200 — just $700 more than a year’s worth of operating expenses.

Waltz said he hopes other nonprofit organizations take note of the loss suffered by the Knights of Pythias.

“We are more frequently than we would like to seeing cases where nonprofit organizations have their funds embezzled,” Waltz said. “We think the problem might be that everyone assumes people engaging in an organization to serve the public good [can be trusted], and they trust each other, but not everyone is trustworthy.”

Peterson was given “easy access to money,” Waltz said, and noted, “I think it’s important that any business do background checks on anyone handling money. There [should be] a checks and balances system so no one person can take money without another knowing about it.”

While Sanborn said “there was supposed to be checks and balances right along,” the only way they could have insisted Peterson return the financial documents would have been for Commander Daryl Pratt to have called for a vote of lodge members to demand Peterson return them, and Pratt was ill.

Pratt’s voice mailbox was full on Monday.

At this point, the Knights’ only hope, Sanborn said, is to rent an unfinished space at the end of the building.

“Then again, I don’t know if we have enough money to fix it up,” Sanborn said. “Either that, or we’re going to close the doors.”

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