WOONSOCKET – Rachel Arruda, the former municipal court clerk accused of embezzling nearly $400,000 from the city, rejected the state’s offer of a plea bargain in Superior Court Tuesday, opting to fight the charges in a trial.
In trade for a guilty plea, state prosecutors told Judge Netti Vogel they were prepared to recommend that Arruda be sentenced to 15 years, with no more than 18 months in prison and the balance suspended with probation. In addition, she would have had to make full restitution to the city within 14 years.
Wearing a black pants suit and a flowered blouse, Arruda made a brief appearance before Vogel to turn down the offer.
“You want to reject it all and go to trial, is that correct?” Vogel inquired.
Standing beside her attorney, Mark Smith, Arruda replied firmly, “Yes, your honor.”
State Prosecutor Carole McLaughlin urged Vogel to schedule a date for the trial to begin. Vogel declined, but she indicated that she expected the case to be reached for trial around September.
Vogel set Aug. 20 for a status update, a routine opportunity for lawyers to firm up their timelines.
Arruda’s decision caught city officials off-guard.
“We had heard earlier that the situation was resolved through a plea agreement, so yes, this does come as a surprise,” said Finance Director Thomas M. Bruce III.
Arruda, 64, of 152 Farm St., had worked at City Hall about 32 years, beginning in 1978, holding an assortment of clerical positions. When the city created a municipal court to hear traffic cases in 1987, she was promoted to municipal court clerk – the city’s first – a position she held until she retired in mid-2010.
State police say that between 2004 and the time she retired, she pilfered $398,538 in fines, fees and other funds that were generated by the city, largely in the form of traffic tickets. She is facing one count each of felony embezzlement and fraudulent conversion.
Each of the charges carries up to 20 years in prison, but it’s unlikely a judge would see fit to impose the maximum. Arruda has no prior criminal record and for many years she enjoyed a positive public profile in the city as a member of the Autumnfest Steering Committee. She is also the legal guardian of a granddaughter who is in her early teens.
Pro-rated on a per-annum basis, the sum Arruda is accused of embezzling was greater than her municipal salary. Bruce said Arruda is still collecting a pension from the Employees Retirement System of Rhode Island, but the city is planning to initiate a procedure to revoke her retirement benefits under the theft of honest services statute if she is convicted. The state retirement system has already said it would consider the request.
Despite Arruda’s refusal to withdraw her not guilty plea, Amy Kempe, spokeswoman for Attorney General Peter Kilmartin, said “the state’s offer stands.”
Arruda could change her mind any time up to or even during the trial.
“A defendant always has a right to a trial or to plead guilty,” she said. “However, those are decisions for the defendant and her counsel to weigh. The state is prepared to move forward with the case.”
Smith, a well-known criminal defense lawyer from North Smithfield, appeared before Vogel for just a few minutes during a break in another trial Wednesday. He quickly left after the hearing and subsequent efforts to reach him later in the day were not successful.
Arruda’s was one of two high profile embezzlement cases to emerge from City Hall in 2010. Former Treasury clerk Michelle Giguere was accused of converting some $7,000 of the city’s money for her own use. In October 2012, she pleaded no contest to one count of felony embezzlement and was sentenced to three years’ probation. She was also ordered to make full restitution to the city by the same judge – Vogel – who is presiding over Arruda’s case.
Follow Russ Olivo on Twitter @russolivo