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Town left high and dry after director is accused of siphoning funds to mistress

By Haimy Assefa and Laura Ly, CNN
updated 12:21 AM EDT, Fri October 18, 2013
STORY HIGHLIGHTS
  • Henry L. Centrella Jr., 59, was arrested in August on five counts of first-degree larceny
  • Investigation has found that more than $2 million has been misappropriated
  • Winchester, Connecticut, has been left scrambling for a way to pay its bills

(CNN) -- The arrest of a Connecticut town's finance director -- who is accused of embezzling $2.3 million while financially supporting his mistress in Florida -- has left the small community in financial crisis.

Henry L. Centrella Jr., 59, was arrested in August on five counts of first-degree larceny after several months of investigation found more than $2 million of misappropriated funds from January 2008 through November 2012, according to his arrest warrant.

Centrella had served as the finance director for the town of Winchester since 1982 and had unrestricted access to the town's assets and finances for more than 30 years. He was fired in January, the warrant said.

A private auditing firm discovered an irregularity in the town's finances, which led to criminal allegations, Connecticut State Attorney David Shepack told CNN.

Winchester, Connecticut, has a population of about 11,500.
Winchester, Connecticut, has a population of about 11,500.

Centrella, who lived in neighboring Winsted according to the arrest warrant, allegedly gathered the large sum of money by using various schemes such as filing inflated tax information and misappropriating town funds. According to sworn statements written by members of his staff, Centrella never allowed anyone to assist him with depositing the town's money in the bank, even if he was on vacation, insisting that money be kept in a drawer for him until his return.

The financial consequences for the small Connecticut town of Winchester have been "wide-ranging and deep," according to Kevin Nelligan, the town's attorney. The town has had to lay off police officers and other government workers because of the financial strain, he said.

Unable to pay bills on time, repair public roads and facing the possibility of schools missing payroll, Nelligan expressed it might take years for the town to recover.

The state investigation also claims that Centrella had a mistress in Florida whom he met in 2000 at a casino he frequented.

In 2008, he told the woman his divorce was finalized and the two became romantically involved. Centrella and the woman were engaged from 2009 until December of 2012, when she discovered he was still married to his wife, Gregg Centrella.

During their relationship, Centrella convinced the woman to quit her job and move south. He supported the woman financially, even buying her a wedding dress, the warrant says. She told investigators he made plans to purchase a home with her, and told her he would soon move to Florida to be with her.

Centrella paid for all of these expenses in cash. He reportedly told his mistress he acquired his money from selling 88 acres of land to Disney World and by investing in Google stock, according to the warrant.

Based on Centrella's alleged activities, there is approximately $7 million in cash that was not used for intended purposed, leading to a cash flow problem for the town, said Town Manager Dale Martin.

The town is now seeking $2 million in private loans from local banks, Martin told CNN. The money will be used for pending payments until the town collects the remaining tax for the year.

The man responsible for the town's financial turbulence was once respected and trusted by the tightknit community, said Martin.

Centrella is being held at the New Haven Correctional Facility on $100,000 cash bail. With a civil suit pending against Centrella and his wife, all of their assets have been frozen, said Nelligan.

Gregg Centrella reportedly told investigators that although they still reside together, she had not spoken to her husband in months. She claims the only knowledge she had of her husband's activities were from what she read in the newspaper, the warrant says.

The investigation is still ongoing, but Nelligan said he is confident that the amount of money that has been embezzled will increase as the case unfolds.

Centrella's attorney, Robert Dwyer, did not immediately respond to CNN's request for comment.

Winchester is in northwestern Connecticut and has a population of about 11,500, according to the town's website.

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