The Pembroke woman indicted last month for allegedly stealing more than $23,000 from the state while she worked for the Department of Resources and Economic Development stole nearly $10,000 from the state in welfare payments before DRED hired her, according to court records.

Holly Wheatley, 36, was also romantically involved with DRED's married business manager during her alleged thefts from that office, according to court records. The business manager was not involved in the thefts and has not been charged, said Assistant Attorney General James Boffetti, who is prosecuting Wheatley.

"There is no evidence that anyone else was involved in these thefts," Boffetti said.

Yesterday, DRED Commissioner George Bald, who was commissioner when Wheatley was hired in September 2002, said he was unaware Wheatley had a criminal record when she joined the office. In addition to defrauding the state of welfare money, Wheatley had served prison time for thefts in Grafton and Cheshire counties before DRED hired her, according to court records.

The office's business manager and Wheatley's colleagues became aware of her past before she allegedly began stealing from DRED. Bald declined to say what supervision, if any, Wheatley worked under once her co-workers learned of her past criminal convictions.

According to one court record, officials in Vermont, where Wheatley lived before moving to New Hampshire, allege Wheatley defrauded that state of unemployment assistance. Vermont officials said they could not confirm that yesterday, because those matters are confidential.

Bald said the office now does background checks on new hires.

"In retrospect, she certainly should not have been hired," Bald said. "But with the pending investigation and arraignment, the attorney general has suggested that I not say anything more."

Bald said he could not discuss the relationship between Wheatley and the office's business manager, because of personnel rules.

However, at least the business manager knew of Wheatley's past early in her tenure at DRED. Within four or five months of Wheatley's hire, she violated parole, according to a probation report contained in court records. The business manager testified on Wheatley's behalf at the hearing, Carol Cochrane, Wheatley's former probation officer, said yesterday.

Wheatley's New Hampshire record dates back to 1995 when she was charged with four felony-level thefts in Grafton County, according to court records. The details of those thefts were not immediately available, but Wheatley was convicted and ordered to pay $10,000 in restitution, according to court records.

She violated her probation and parole in August 2006 by failing to tell her then-employer of her legal status and for using drugs and alcohol, according to the probation report.

About the same time, Wheatley was convicted of eight counts of theft in Cheshire County. The specifics of those charges also were not immediately available, but court records said Wheatley was ordered to pay $3,000 in restitution in that case.

Wheatley was given probation but also sentenced to serve time in the state prison's shock incarceration program, a four-month, intensive boot camp for young, nonviolent offenders. The program no longer exists.

Wheatley was in her early 20s at the time, the only woman in the group. She was chosen by her platoon to speak at a 1997 graduation ceremony.

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