The Borough of Shenandoah has begun recovering funds tied to a forensic investigation involving its former secretary/treasurer, with officials confirming that an initial $40,000 payment is being issued through an insurance bond, and an additional $60,000 is pending.
According to borough officials, the recovery stems from findings detailed in a forensic accounting report prepared by Joseph Yanushefsky & Company, in coordination with special counsel. The bond, totaling $100,000, was issued through Travelers Casualty and Surety Company of America in connection with the tenure of former Secretary/Treasurer Anthony Sajone.
The initial $40,000 payment is tied to documented failures in retiree life insurance coverage identified during the forensic review. The remaining $60,000 is expected to be released once additional documentation is submitted and reviewed by the insurer.
Insurance Lapse and Improper Payments
The forensic report outlines a series of issues involving the borough’s retiree life insurance policy:
- The policy lapsed on December 31, 2020, due to non-payment of premiums
- A new policy was initiated in February 2022, but retirees were incorrectly classified as active employees
- A life insurance claim filed in April 2023 was later canceled due to discrepancies
- The borough issued a $10,000 payment from general funds to a beneficiary without prior council authorization
- Additional retiree-related payments brought the total improper disbursements to $40,000
Officials said these events occurred under prior borough administrations and contributed directly to the current insurance bond recovery.
Potential Additional Liability
Beyond the bond recovery, the borough estimates it could face up to $240,000 in total obligations related to the lapse in retiree life insurance coverage. This figure includes previously approved payments, such as a $25,000 disbursement to the estate of a former employee.
Documentation related to those payments is also being submitted to the insurer for potential reimbursement.
Ongoing Investigations
Borough officials emphasized that the insurance recovery is separate from ongoing criminal investigations by the Pennsylvania Attorney General’s Office and the Internal Revenue Service. Those investigations remain active.
Borough Response
Borough Manager Mike Cadau described the recovery as a significant step in addressing past financial issues.
“This is a significant step forward in holding past actions accountable and recovering taxpayer funds,” Cadau said. “We will continue to aggressively pursue every available avenue to ensure the residents of Shenandoah are made whole.”
Council President Joe Boris also noted his involvement in the process and commended those working on the investigation.
Officials added that despite some public claims that the investigation was politically motivated, the recovery of funds through the insurance bond reinforces that the effort is based on documented financial findings.
What’s Next
The borough says it will continue working to secure the remaining $60,000 and pursue any additional recoveries, including reimbursement for costs associated with the forensic investigation.
Residents seeking a copy of the forensic report can contact Borough of Shenandoah directly.