Peggy Kempton, a former Harvard resident and former chief financial officer of Fruitlands Museum, turned herself in to authorities Tuesday for arraignment at Worcester Superior Court after a grand jury returned several indictments against her for allegedly embezzling over $1.3 million from the museum.

Now residing in Hollis, N.H., Kempton is charged with 14 counts of larceny over $250, three counts of fraudulent use of credit cards, and one count of false entry in corporate books. After pleading not guilty to all criminal charges, she was ordered held on $5,000 cash bail. She is due back in court July 22 for a pre-trial conference. Fruitlands may bring a civil case against members of Kempton’s family pending results of the pre-trial conference.

As first reported in the Press in September 2008, the Fruitlands Museum staff discovered several financial discrepancies after Kempton’s sudden departure. Maud Ayson, the director at the time, contacted the museum’s attorneys and hired a forensic audit team to investigate. Fruitlands contacted the state attorney general’s office, as well as its donors, soon thereafter.

The resulting complaint that was filed with the Massachusetts Superior Court claimed that Kempton “embarked upon an embezzlement scheme in which she opened numerous credit accounts with various entities, obtained credit cards in her own name and in the name of Fruitlands, and began making various personal charges wholly unrelated to Fruitlands’ business activities, and then paying these personal charges with Fruitlands’ funds.” Additional allegations in the complaint cited the involvement of Kempton’s children in fraudulent credit card activity.

The attorney general’s office stated in a news release this week, “Authorities allege that on numerous dates between January 2002 and February 2008, Kempton allegedly stole funds from her employer to pay for over $1.3 million in personal purchases that Kempton and her children made using 14 different credit cards.  One of the credit cards was in the name of a co-worker who had no knowledge that the card existed and was being used by Kempton.” The statement goes on to say, “Kempton also allegedly used ‘cash advance checks’ from credit cards in the names of three co-workers to pay for personal purchases that Kempton made on her own credit cards.  Kempton allegedly did this without the knowledge or authorization of the co-workers.  Investigators also discovered that Kempton allegedly manipulated the financial records of her employer to make it appear that the employer’s funds that Kempton used to pay for personal purchases and other expenses were being used for legitimate expenses.”

Tim Firment, the museum’s newly appointed chief executive officer, said recently that when the financial discrepancies were uncovered, the museum immediately terminated its relationship with its auditors, Solar & Kilcoyne, and filed a separate civil complaint against them for negligence in performing their duties. When asked how the alleged embezzlement had affected daily operations, Firment said it had forced the staff to do more with less. However, Fruitlands now has positive cash flow, has an additional revenue source due to more efficient leasing of two buildings, and has 50 percent more visitors.