Three colleagues from the Maynard pension board pulled McDaid into a meeting room to confront him with troubling information. Through an anonymous fax, they had just learned that McDaid had a drug problem and that six months earlier he was convicted of stealing $165,000 from a charity where he had kept the books.

McDaid, who oversaw Maynard’s $29 million retirement fund, was attending a 2012 conference of public pension officials. Such events are usually predictable affairs, but this one took a dramatic turn.

Timothy McDaid looked out of place at the Hyannis resort, haggard and sullen and wearing a dark trench coat on a warm June day.


“Did you hurt us too, Tim?” one of them asked.

His long-running ruse exposed, McDaid broke down in tears, according to board members. He admitted writing himself $739,000 in checks from the town’s pension fund. The news was shocking. But it shouldn’t have been.

How McDaid was able to steal from two organizations over five years is a story of lax oversight, small-town politics, and poor communication by the Middlesex district attorney’s office. It also serves as a cautionary tale in a state with a decades-old web of tiny pension offices, in towns similar to Maynard, monitored by central audits only every three years.

McDaid, now 48, joined Maynard’s retirement system in July 2007 with an impressive resume. He had been chief auditor for the Public Employee Retirement Administration Commission, known as PERAC, the group that regulates Massachusetts city and town pension systems. But Maynard’s pension directors did not realize that McDaid had been asked to resign from his $80,000-a-year job there. And they did not call to check his references.

Instead, the board relied on a glowing Dec. 13, 2006, letter from PERAC’s deputy director at the time, Kevin Blanchette, his “heartiest recommendation” of McDaid, “without reservation.”


But that letter of recommendation had actually been written to pension officials in Cambridge, McDaid’s first choice for a job; his late aunt had been a popular figure there, and he considered himself a strong candidate.

But Cambridge found a more qualified applicant. Disappointed, McDaid went after the Maynard job, submitting a photocopy of the Cambridge recommendation letter, according to public records obtained by The Boston Globe.

The Maynard pension fund was coming off a period during which its prior director had run afoul of the state Ethics Commission. On paper, McDaid looked like a reassuring hire, with top credentials.

“People coming out of PERAC, they had a halo around them,’’ said Thomas Gibson, a lawyer who represents the Maynard pension system. So McDaid was hired as a part-time pension director at a $46,000 salary, about half his prior pay.

PERAC executives were stunned to learn McDaid had landed the Maynard job. Blanchette, now head of the Worcester Regional Retirement System, said he was not even aware McDaid had reused his Cambridge reference letter.

Joseph Connarton, the chief of PERAC, was surprised, too. It was he who had asked McDaid to resign, for poor work attendance and for falling behind on audits.

“Maynard never called us saying that he was interviewing for a job,’’ Connarton said. But after the fact, Connarton said he didn’t believe he had a duty to tell the Maynard board about McDaid’s shortcomings.

Neither McDaid nor his former lawyer, Timothy Flaherty, returned calls seeking comment for this story.


Before leaving PERAC, McDaid had started taking on side jobs, including one handling the books for the Asperger’s Association of New England. Dania Jekel, the Watertown-based nonprofit’s executive director, said she hired him largely on his work history, including at PERAC and in the private sector.

Jekel said McDaid was likable and came across as trustworthy. He was married with children, the son of a retired Somerville firefighter, a graduate of Boston College High School and Northeastern University.

In November 2009, three years after McDaid started his part-time position at the Asperger’s association, auditors discovered he had been stealing cash collected at the group’s social nights, events where adults with Asperger’s paid $7 to eat pizza and play chess or computer games, Jekel said. In addition, the nonprofit found McDaid had forged checks to himself. All told, about $165,000 was missing.

Jekel said she immediately fired McDaid and alerted the office of Gerard T. Leone Jr., the Middlesex district attorney at the time. Two years later, McDaid pleaded guilty to the theft and was sentenced to five years of probation, ordered to seek treatment for substance abuse, and required to pay $177,000 in restitution.

McDaid used the money to support a drug addiction he developed after injuring his back while gardening in 2006 and being prescribed fentanyl patches to treat the pain, according to court records. The drug use caused him to make “massive errors in judgment to obtain funds to purchase illicit opiates to feed his addiction,’’ Flaherty would later write in a court memorandum.


McDaid agreed to give back $75,000 right away and to pay $1,000 a week until the charity was made whole.

But the district attorney’s office did not report the conviction to PERAC, as required under state law. Somehow, over the two-year investigation, prosecutors apparently forgot that McDaid was also a public employee in Maynard, officials acknowledged at the time.

Asked how that could have happened, MaryBeth Long, spokeswoman for the current Middlesex DA, Marian Ryan, said in a statement that McDaid’s conviction “related to fraud committed at a private nonprofit organization, and as such it did not appear to trigger a reporting requirement.’’

It was an expensive oversight.

Amazingly, in the age of Google, McDaid was able to keep his conviction secret from the town and pension officials, and the regulators at PERAC who were performing a routine audit of the Maynard retirement fund.

He also hid the fact that he was stealing from the pension fund — in part to make restitution payments to the Asperger’s association, court records would later show.

For months, McDaid cut checks to himself from a small office in Maynard’s Town Hall, where he was paid to administer a fund with 98 retirees and 186 active workers. Heavy turnover in the town’s financial staff meant there was no second set of eyes on the books, according to court records and interviews. McDaid told officials he was happy to help out by writing the checks and reconciling the bank records.


Just days before McDaid’s 2011 conviction in the Asperger’s foundation case, PERAC auditors filed their report on the Maynard pension fund, citing numerous irregularities. Glaringly, seven months of cash reconciliations had not been done, and McDaid had failed to produce various documents and books they requested.

“The system had not filed any monthly cash book filings for any month in 2011’’ until the auditors arrived in late June, the report said. Still, Connarton, whose job includes signing off on audits, approved Maynard’s. He said the financial records met the regulator’s standards, except for the issues noted. The report was filed in October, with a follow-up scheduled for six months later.

By June 1, 2012, the auditors had again come and gone. Connarton now says they had identified additional concerns that were going to lead to further investigation.

But what they didn’t yet know was McDaid had pilfered $739,000 from the pension fund. And he might have continued to drain money from the system if it hadn’t been for the mysterious fax that arrived in PERAC’s office the Friday before the Hyannis conference.

It was a copy of the court case from the Asperger’s foundation theft. There was no cover sheet, no traceable fax number.

Connarton alerted the Maynard board, which held an emergency meeting and then confronted McDaid.

A flurry of activity followed. McDaid was arrested and held in jail for five months. Connarton and PERAC took credit for uncovering the fraud. That August, Connarton amended the Maynard audit, retracting his initial stamp of approval. After seeing records that weren’t previously available, he wrote, the audit “does not reflect an accurate account of the system’s financial statements.’’

A full investigation of the fund ultimately revealed the missing money.

The case received attention in 2012, when McDaid was arrested, and last year, when Superior Court Judge Kathe M. Tuttman, who had also presided over the Asperger’s case, again gave McDaid a suspended sentence, instead of the seven to nine years of jail time prosecutors requested. He also was banned from working in finance or accounting.

A court memorandum seeking a lenient sentence from the judge included several letters from friends and family members. McDaid’s sister, Kathryn Costa, said her brother told her during a jailhouse visit that he regretted his addiction and the pain he had caused.

“He is so sorry for the mistakes he has made and is so remorseful for the things he has done,’’ wrote Costa, a Somerville Police Department detective.

Maynard had an insurance policy that covered $500,000 of the pension loss, and McDaid had to forfeit the $75,507 pension account he had accumulated while working for PERAC and the retirement fund. He was also ordered to reimburse the fund $200 monthly, but only after he finished paying back the Asperger’s association. Those payments also were reduced to $200 a month.

But according to Jekel, they have been sporadic. At their current rate, she said, “He’s never going to pay it back.’’

No pensioners have been hurt by the theft. But the town may ultimately have to come up with the missing $164,000 or make it up through investment returns.

Connarton is outraged that McDaid did not serve more time in jail. He said his agency, PERAC, did its job. He also said his staff is more now alert to strange behavior or findings related to audits.

“We followed the same protocol in Maynard as we did anywhere else,’’ Connarton said. “We had no knowledge that he had a money problem here or at Asperger’s or in Maynard. So I don’t know how we would see the red flag.”

Related coverage:

• Man arraigned on charges he stole more than $730,000 from pension fund

• Charges in Maynard pension fund theft

• Maynard pension manager accused of theft

Beth Healy can be reached at beth.healy@globe.com. Follow her on Twitter @HealyBeth.