Lehigh County District Attorney Jim Martin announced Tuesday during a press conference charges were filed against a former South Whitehall Township employee and her husband, a former township police officer, who allegedly conspired to embezzle $854,497 from the utilities account of the South Whitehall Finance Department between 1999 and June 2012.

Nancy A. Tonkin, 66, and William J. Tonkin IV, 69, of 1124 Little Lehigh Drive South, Emmaus, are each charged with three counts of dealing in the proceeds of unlawful activities, a first-degree felony, one count each of theft by unlawful taking, theft by deception, theft by failure to make required disposition of funds and receiving stolen property, all third-degree felonies, and one count of criminal conspiracy, a first degree felony.

Nancy Tonkin surrendered to police May 21. Her arraignment was scheduled for that day.

Her husband was expected to surrender May 22, according to Martin.

Lehigh County Detective Ed Ressler and Lehigh County's Sixth Investigating Grand Jury investigated the case.

The Grand Jury heard testimony from more than 14 witnesses presented by Chief Deputy District Attorney Charles. F. Gallagher III and reviewed more than 50 exhibits, including township financial records and joint bank account records.

The Grand Jury handed up a presentment on April 26, 2012. Supervising judge of the Grand Jury, Lehigh County Judge Maria L. Dantos reviewed the presentment and Martin approved the charges.

Martin said the township and Township Manager Jon Hammer were very cooperative throughout the investigation.

The township notified police and enlisted the help of a certified public accountant and certified fraud examiner to determine the extent of the embezzlement.

"The staff of the township's finance department and accountant Anthony Buczek, a partner in the accounting firm of Buckno and Lisicky, conducted a painstaking review of utility accounts to determine the extent of the embezzlement scheme and to determine if anyone else was involved," said Martin. "No other individuals were implicated in the scheme."The township has since implemented internal controls to prevent future thefts.

"We are fully committed to insure restitution by our former employee's actions," said Hammer. "We encourage anyone to contact the township with concerns.

The township can be contacted by calling 610-794-1330 or via email at residentconcerns@southwhitehall.com.

The investigation began in July 2012, when Hammer and South Whitehall Chief of Police Thomas Toth contacted the Lehigh County District Attorney's Office about the suspected theft of a large amount of cash revenue funds from the utilities accounts of the township's finance department.

Nancy Tonkin was a township employee for 30 years and served as utilities supervisor, where she handled billing and receipt of payments to the township for water, sewer and refuse/recycling services provided to residential and commercial customers.

Her husband, who was a police officer for the township from November 1969 to February 1996, worked as a security guard at William Allen High School, Allentown.

Nancy Tonkin was suspended June 8, 2012, when a new finance director reviewed accounts and suspected thefts.

The investigation involved reviews of personal joint bank account records of the Tonkins at three different banks in Lehigh County since 2005.

In the year before Nancy Tonkin's suspension, there were 36 cash deposits amounting to $35,542 at one bank.

Since August 2005, a total of $247,406 cash deposits into the personal joint accounts of the Tonkins at three banks. Both used the joint accounts to run their household and to gamble.

The Grand Jury looked at the Tonkins' gaming activity at three Pennsylvania casinos and five New Jersey casinos.

Based on slot machine use, casino reports showed Nancy Tonkin lost $94,785 and her husband lost $21,452 from January 2009 until June 2012.

Nancy Tonkin allegedly employed a sophisticated "lapping" scheme to conceal the thefts that involved repeatedly misapplying residents' payments and determined there was no audit trail and no accountability for transactions that occurred at the cash register because it wasn't connected to a server or the township accounting system.

When one resident paid a water invoice with cash, that cash was not deposited to the township bank account nor was the resident's water account credited for the amount.

If the next resident paid a sewer bill by check, the check would be credited to the other resident's water account and deposited into the bank.

If a third resident paid a refuse invoice with a check, that check would be credited to the second resident's sewer account.

When a new quarterly refuse billing period approached, Nancy Tonkin allegedly would pull invoices because it would indicate the resident had not made a payment as the account had never been credited.