LAWRENCE - A North Andover school employee illegally claimed her boyfriend as her spouse on her health insurance plan eventually costing the town more than $200,000 to pay for his cancer treatments, police said.

Police charged Sharon Markle, 52, and Keith Conrad, 51, of 34 William Pond Road, Atkinson, N.H., with presenting a false insurance claim, larceny over $250 and conspiracy.

During their arraignment yesterday in Lawrence District Court , Judge David Cunis allowed them to remain free on personal recognizance while the case is pending.

North Andover spent $215,000 on insurance claims for Conrad. Markle worked in food services at North Andover Middle School, then as a custodian. Her former boss, Food Services Director Erika Murphy, told police she had to lay off employees because of the money spent on Markle's boyfriend, Officer Thomas Donovan wrote in a report.

"Murphy stated that as a result of Markle's fraud, her budget had a loss of approximately $60,000, which caused her to lay off at least two employees," Donovan wrote.

The couple's attorney, Philip Doherty of Lawrence, declined to comment when reached by phone last night.

Inspector Daniel Cronin said police began investigating in August based on information from one of Markle's co-workers.

Cronin said he called the couple's home on Aug. 22 and that Conrad identified himself as Markle's "husband."

Cronin said he asked if they were legally married, and that Conrad said they had been living together for more than 20 years and considered their relationship a "common law" marriage, Cronin wrote in his report. Conrad claimed that another school employee told Markle other people had done the same thing, Cronin said.

According to Cronin's report., Conrad suffered serious injuries in a car accident in Kingston, N.H. in 2006, and that it was during that time that doctors discovered he had cancer - the treatments for which were paid for by Markle's insurance.

Conrad told Cronin that he was unemployed and that car insurance paid for the care he received because of the accident.

Markle started working for the School Department part-time in 2001. She became full-time in 2002 and qualified for health insurance. She initially signed up for a single person plan, then switched to a family plan on Feb. 27, 2004 and added Conrad, police reports said.

Murphy told police that sometime in 2005 she learned Markle had listed her boyfriend as her spouse, and that Conrad had gotten hurt and cost the town "thousands in medical expenses."

Murphy said she confronted Markle in May of 2005 and told Markle she was committing fraud.

"Murphy stated that Markle then told her that she didn't put Conrad on the insurance to be malicious, but that she believed that she could because she had lived with him for at least 10 years," Donovan wrote in his report.

Markle also told Murphy other employees told her she could put Conrad on the insurance, and that other people did it. Markle did not give Murphy the names of those people, Donovan's report said.

In May of 2005, Murphy reported the situation to Joan Loporto, who was the head of human resources for the School Department at the time.

"Murphy stated that nothing was done to correct the situation at this time," Donovan wrote.

Murphy reported the alleged fraud to the new human resources director, Deb Vartanian, in June 2006.

"Murphy stated that Vartanian appeared to take the matter seriously and had brought the matter forward to the attention of the town's administration," Donovan wrote.

School officials put Markle on administrative leave in August. Interim Superintendent James Marini could not be reached for comment.

Markle and Conrad are due back in court on Dec. 18 for a pre-trial hearing.