Last modified: Wednesday, May 9, 2007 2:00 AM EDT Attleboro City Councilor James Hanley (Staff photo by MARTIN GAVIN) Hanley faces larceny charge BY DAVID LINTON SUN CHRONICLE STAFF ATTLEBORO - City Councilor James Hanley faces a felony larceny charge in a dispute with a former business partner at Hanley's weekly newspaper, My Backyard. The Ward 1 councilor and former school committee chairman is alleged to have failed to pay $13,500 in medical costs incurred by former partner Michael Poulin and his wife, Clara Poulin, after neglecting to pay the company's health insurance bills. Hanley, 64, of 34 Rosewood Ave. in South Attleboro, will be summonsed for arraignment May 30 in Attleboro District Court. The complaint filed by Detective Russell Castro, who investigated the case with Detective Timothy Cook Sr., alleges Hanley used funds collected for the Poulins' health coverage to pay other business debts from October 2004 to July 2005. In an interview Tuesday, Hanley denied any criminal intent, saying he and the Poulins had tried to reach an out-of-court settlement regarding money he owed for their medical coverage. "I did everything in my power to solve this problem before it went to a larceny thing," Hanley said. Hanley's lawyer, Roger Ferris of Attleboro, slammed the criminal complaint. "A former business partner has transformed a legitimate business dispute into unfounded criminal allegations," Ferris said. "Mr. Hanley has cooperated with police throughout the investigation, maintaining that he has committed no wrongdoing." Hanley and Michael Poulin, 45, of Pawtucket, started My Backyard Publishing in March 2000, but the partnership dissolved after they had a falling out in 2004, according to the police complaint filed in court. Poulin, who owned a 40 percent stake in the business, resigned in September 2004, but with an agreement that Hanley would buy out Poulin's share, according to the complaint. As part of that agreement, according to court records, Poulin was to retain health insurance coverage for 18 months through My Backyard's group health plan and pay monthly insurance premiums. But Hanley never forwarded Poulin's monthly payments to the insurer, United HealthCare Insurance, and is alleged to have used the money instead to pay other bills, according to the complaint. When the Poulins received notice from United HealthCare in July 2005 that their insurance might be cancelled, Michael Poulin went to the My Backyard offices with the notice, according to the complaint. The Poulins were concerned about their health care coverage, according to court records, because Michael Poulin was scheduled for surgery in July 2005 and his wife had medical treatments scheduled. The couple went ahead with the medical procedures, only to find out later that they were not covered by insurance, according to the complaint. Hanley did pay the couple cash for prescriptions at the time, according to court records and Hanley. Hanley said he contacted United HealthCare at the time to try to get the couple's insurance reinstated. However, when that proved unsuccessful, Hanley said he attempted to negotiate a settlement with the Poulins. The dispute was never resolved because the Poulins wanted a lump sum payment for their medical bills, but Hanley wanted to make monthly payments to the couple, according to the complaint and Hanley. The Poulins reported the dispute to police in June 2006, according to court records, but the couple and Hanley still tried to come to an agreement. The couple gave Hanley more time to settle the dispute, but allegedly did not receive any money. Clara Poulin contacted police again in December 2006. Police subpoenaed United HealthCare's records during the investigation, and found that Hanley's business had a history of making late payments and sometimes did not make any payments, according to the complaint. In November 2005, according to the complaint, the health care company wrote off a $3,792 balance owned by Hanley as "uncollectible."