Former Munhall manager charged with embezzling $230K from borough

04/02/2014

Former Munhall borough manager Matt Galla was arrested Tuesday for allegedly embezzling more than $230,000 from the borough between 2010 and 2013, according to charges filed by a detective with the Allegheny County District Attorney's Office.

Galla, 44, of West Mifflin, who was hired as a part-time clerk for the borough in 2009, became manager in December 2010 and held the position until he abruptly resigned last June. He did not respond to a request for comment.

Detective William Miller alleges in the criminal complaint that Galla — who had a budgeted salary of $60,000 — overpaid himself by around $12,000 in 2010, $85,000 in 2011, $80,000 in 2012 and $53,000 during the first six months of 2013.

Galla was arraigned Tuesday before Magisterial District Judge Thomas Torkowsky on four counts of theft by deception and placed in Allegheny County Jail in lieu of $100,000 bond.

“(Galla), who had the responsibility for payroll, was in the position to intentionally omit payroll reports, destroy and/or falsify certain payroll records to disguise certain payroll fraud schemes such as overpayments of payroll to himself and under-withholding of Social Security and federal income tax on his fraudulently inflated pay,” alleges Miller.

Borough tax collector Donna Mercuri told Miller that she asked Galla for the 2011 audit in March 2012 but he allegedly told her he didn't like the previous auditor and was going to end the contract.

“(Galla) told Mercuri that he was putting off the audit until after vacation and then took an approximate six-week vacation to California and Las Vegas at a time when he was to be off work only two weeks,” wrote Miller. “Because (Galla) was the only one to prepare the borough payroll, while he was on vacation, problems occurred with the payroll of certain borough employees and the dispatchers were not paid for six weeks.”

When Galla returned, he reportedly said his mother was fatally ill and a foot problem hindered his travel.

That September, Mercuri said she told then-council president Joe Ballas to ask Galla for the 2011 audit and Ballas said Galla told him it was completed. The same sort of exchange continued to occur regarding the 2011 and the missing 2012 audit through the middle of 2013.

Galla reportedly told Mercuri in 2012 that although he made $58,000, he wanted to be making $85,000 because Michael Terrick, manager of the Munhall Sanitary Sewer Municipal Authority, made $85,000, according to the complaint.

“(Galla) felt that he worked harder than Terrick and should be making just as much,” alleges Miller.

Mercuri said that prior to resigning last June, Galla told her “he was tired of having to kiss up to everyone around the borough and that he has something on everyone so they should not mess with him.”

After Galla quit, the borough appointed Tim Little as interim borough manager and the administration began to learn the extent of the missing information.

Little reportedly could not find tax statements or other payroll reports from 2011 and 2012 on the computer Galla used for payroll and, although the borough utilizes Apple computers, Galla — whose background is in information technology — used a 25-year-old Disk Operating System machine for payroll, according to the criminal complaint.

Because Little could not access payroll information on the old computer and the information was necessary to complete borough payroll in the future, Munhall officials decided to send current council president Dan Lloyd to take the computer to Galla's house so he could obtain the information. About three days later, Lloyd received the computer back and returned it to the borough with the 2013 payroll report on a flash drive, but the 2011 and 2012 tax statements and other payroll records have still not been found.

Little was able to piece together payroll records from the Pennsylvania State Association of Boroughs and other third-party sources and learned that in 2010, when Galla was manager only one month, he paid himself more than $61,000, although his budgeted salary at the time was $50,000. Based on IRS records, Galla reported his Social Security wages that year at $23,040, which unlawfully increased his net pay.

Similar inconsistencies were found for the following years, according to the criminal complaint.

In early February, Galla responded to accusations that he was responsible for Munhall's state of financial disarray and said he quit because he could no longer tolerate working under “unethical, immoral and illegal conditions.” He called Mayor Ray Bodnar “despicable” and claimed that Bodnar lacked any “moral or ethical compass.”

Bodnar, however, said the arrest provides vindication to council and the administration.

“For the longest time, I would defend (Galla) to the core,” Bodnar said. “He proved how capable he was and I was delighted with the job he was doing. But it started to get harder and harder to defend him once these allegations started coming out. When he made accusations against me, it broke my heart. But the bottom line is that he stole from the people of Munhall and now he's going to have to answer for it. I look forward to testifying against him.”

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