Sunday, January 25, 2015

Texas Man Pleads Guilty To Embezzling $931K From Contracting Firm

From the St. Joseph News-Press on 1/23/2015:

A Texas man pleaded guilty in federal court to a mail fraud scheme in which he embezzled more than $930,000 from Herzog Contracting Corp. in St. Joseph.

Daniel Reif, 48, of Weatherford, Texas, pleaded guilty Thursday in U.S. District Court to one count of mail fraud and one count of filing a false income tax return.

Mr. Reif admitted that he engaged in a scheme to defraud Herzog from January 2006 through Aug. 26, 2011. The government’s evidence establishes the amount embezzled totaled at least $931,256.

Herzog, which constructs railroads, highways, bridges and airports, has a regional office in Irving, Texas. Mr. Reif began working for Herzog in the Irving office in 2005 as a manager who was responsible for procuring materials and services from vendors.

Mr. Reif founded his own company, Railway Signal Solutions, in February 2005.
He began ordering project materials and services from supply vendors through RSS, then resold those products and services to Herzog at inflated prices. The RSS invoices made it appear as though the materials and services were being provided directly by RSS, an ostensibly independent supply vendor.

Under the terms of the plea agreement, Mr. Reif will be sentenced to 36 to 38 months in federal prison without parole and must pay restitution in an amount to be determined by the court. He must forfeit to the government $105,000 seized from his TD Ameritrade account and a 2010 Tige boat and trailer.

Read the whole story here.

California Woman Sentenced To 21 Months In Prison For Embezzling $480K From Credit Union

From the Orange County Register on 1/23/15:

A Lakewood woman who pleaded guilty to a protracted embezzlement scheme that resulted in the failure of a credit union was sentenced Friday to 21 months in federal prison.

Wendy Wall, 50, was sentenced by United States District Judge James V. Selna in Santa Ana.

In addition to the prison term, Selna ordered a four-year term of supervised release, which would include 12 months of home confinement and ordered Wall to pay $480,273 in restitution, the FBI said in a statement.

Wall pleaded guilty to bank fraud on Sept. 2, for engaging in the embezzlement scheme while employed at the Pepsi Cola Federal Credit Union.

Beginning in 1993 and continuing to February 2014, Wall was the manager and sole employee at the Pepsi Cola Federal Credit Union, a small financial institution in Orange County that served local Pepsi Bottling Company employees, according to the FBI.

While employed there, Wall operated an embezzlement scheme over a period of more than a decade by using her position to create fictitious bank accounts, the FBI said.

Wall withdrew funds against those accounts by creating fictitious loans and by writing checks using the accounts. Wall then deposited the misappropriated funds into bank accounts belonging to Wall or her family members, the FBI said.

The scheme was discovered following an audit by the National Credit Union Association, whose personnel contacted the FBI to investigate. Analysis indicates that the embezzlement scheme led to the eventual failure of the Pepsi Cola Federal Credit Union; however, members were indemnified against losses under an agreement with the National Credit Union Administration, the FBI said.  

Read the whole story here.

Saturday, January 24, 2015

Elderly Michigan Bookkeeper Pleads No Contest To Embezzling $100K

From on 1/23/2015:

The 71-year-old former longtime bookkeeper of a small Muskegon metal-finishing company has pleaded no contest to embezzling more than $100,000 from her employer – an increased charge from what she originally faced.

Muriel Elizabeth Carlson entered the plea Tuesday, Jan. 20. Sentencing by Muskegon County 14th Circuit Judge Timothy G. Hicks was scheduled for Feb. 23.

The no-contest plea is the equivalent of a guilty plea but can't be used against her in case of a civil lawsuit.

Carlson, of Twin Lake, stands convicted of embezzling more than $100,000 over more than six years from Spec Abrasives and Finishing Inc., 543 W. Southern Ave. in Muskegon. According to the arrest warrant, the thefts occurred between October 2007 and early 2014.

The charge is a maximum 20-year felony, though the actual sentence will depend on state guidelines and will likely be lower than that.

Carlson had been charged with embezzlement of between $50,000 and $100,000, a maximum 15-year felony. But the charge was upped after prosecutors and the defense didn't come to an agreement on how much Carlson stole and consequently how much restitution she should pay. Prosecutors increased the charge after consulting with the victims.

"There's not been an agreement between our office and the defense as to the total amount," Chief Assistant Muskegon County Prosecutor Timothy M. Maat said. "However, our office based on all the evidence we've received is convinced it's $100,000 or more."

Carlson accepted that and pleaded no contest to the higher charge.

The total amount stolen remains in dispute. Maat said prosecutors believe the total is more than $150,000. The exact amount of restitution will be decided by the judge after a restitution hearing.

Carlson's attorney, Edward Wasiura, could not immediately be reached for comment Friday, Jan. 23.
Jim Perreault, co-owner of Spec Abrasives, says the total amount stolen may be
$182,000. He and his partner, Jerry Tanis, want to get as much of the embezzled money back as possible.

Carlson kept the firm's books and had control of its accounts since before the partners bought the firm in 2003, Perreault said.

He said the thefts, which amounted to thousands of dollars a month, hurt the company's business and the other employees. Spec Abrasives employs 10 people, he said. The lost profits would have been reinvested in the business, Perreault said.

Perreault said the partners trusted Carlson. Although he said their books were audited, accountants checked them monthly and bank officials looked at them, Carlson because of her position was able to regularly funnel company funds to her personal use.

"It's embarrassing, but we're not the criminals here, we're the victims," Perreault said. "So we shouldn't need to be embarrassed. She faced me every day and was stealing money every day.
"She was like my mother," he said. "I trusted her wholely and completely with everything. Do we need to be so cold that we can't trust anybody anymore?"

Perreault said the embezzlement came to light after the company hired an assistant bookkeeper to help out Carlson in hopes of lightening the burden on her due to her age.

After the thefts were discovered, the company fired Carlson and notified authorities. She was charged in May 2014.


Read the whole story here.

Massachusetts Woman Pleads Guilty To Embezzling $1.5+Million From Medical Practice

From the Daily Hampshire Gazette on 1/22/2015:

A Belchertown woman pleaded guilty Thursday in U.S. District Court in Springfield to embezzling more than $1.5 million from the Northampton medical practice where she formerly worked as an office manager.

Roxanne Tubolino, 56, pleaded guilty to wire fraud and six counts of tax evasion. Maximum sentences on all seven charges total 50 years in prison. Judge Mark G. Mastroianni scheduled sentencing for April 16.
According to a statement issued by U.S. Attorney Carmen M. Ortiz, Tubolino worked at Northampton Internal Medicine Associates from 2008 through Sept. 11, 2013. Tubolino embezzled $1,562,206 by writing checks from the medical practice’s corporate account to pay her personal credit cards issued by American Express, Bank of America, Chase and Barclays, according to the U.S. attorney’s office. She concealed the thefts by entering the checks into the medical practice’s financial records as business expenses, prosecutors reported.
Tubolino also filed tax returns for 2008 through 2013 in which she did not report any of the income she received from the embezzlement, according to the U.S. attorney’s office.
Read the whole story here.

Friday, January 23, 2015

Nebraska Woman Reaches Plea Agreement In $2.5 Million Embezzlement Conspiracy

From KETV Ch.7 on 1/22/2015:

A Fremont woman tied to an embezzlement scheme that netted nearly $2.5 million has been convicted on three misdemeanor counts.

The Fremont Tribune reports that 51-year-old Kathy Springer-Hesman pleaded no contest Thursday to receiving stolen property and two counts of attempted filing of false tax returns. Prosecutors had lowered some charges and dropped others in return for her pleas. Her sentencing is set for March 27.

Springer-Hesman and 43-year-old Joleen Cameron are accused of helping Cameron's father, Dennis Hesman, steal from his employer, Gavilon.

The 66-year-old Hesman died in August. He was accused of creating fake grain receipts at the grain elevator he ran.

A court document says Cameron has worked out a plea deal and is asking that her arraignment hearing be delayed until Feb. 11.

Thursday, January 22, 2015

Michigan Woman Charged With Embezzling $197K From Local Hotel

From the Petoskey News on 1/22/2015:

A Conway woman is facing up to 20 years in prison after she was recently charged with embezzling nearly $200,000 from a Petoskey-area hotel she managed for 17 years.

On Dec. 27, Emmet County Sheriff's deputies arrested Colleen "Koko" Gay Loar, 50, on a charge of embezzlement by agent or trustee, more than $100,000.

The charge is a felony punishable by up to 20 years in prison.

Loar is free from custody after posting a $10,000 surety bond on the day of her arrest.
According to an Emmet County Sheriff's office affidavit filed in the case, the alleged embezzlement took place over a nearly five year period from April of 2008 to Jan. 31, 2013.
According to the affidavit in February of 2013, the owners of the company that operates the Petoskey Comfort Inn, located at 1314 U.S. 31 North in Bear Creek Township, reported that they believed that Loar, the hotel's longtime manager, had been stealing money and using company funds to pay for her personal goods and services.
Police said their investigation showed that Loar allegedly misappropriated a total of $197,000.
According to the affidavit, Loar is accused of using company money to buy computers, a tankless water heater and two water treatment units for her home, automotive repairs for her car, a $500 purse, clothing at Boyne Highlands, phone bills, and to make more than $6,400 in donations to area charities and nonprofit groups.
She also is accused of writing 10 checks on the company's account to "cash" totaling $17,626 and allowing another person to stay at the hotel for a month and only charging him for one night's stay — a $5,770 value.
The owners also reported to police that a review of the company's books from 2010-2012 revealed more than $154,000 in missing cash receipts, according to the affidavit.


Read the whole story here.

Former Texas Banker Sentenced For Embezzling $779K

From the Cypress Creek Mirror on 1/21/2015:

Carlos Lavin Ibarra, 34, of Houston, has been sentenced to federal prison following his conviction on one count of bank fraud, announced U.S. Attorney Kenneth Magidson. Ibarra pleaded guilty July 9, 2014.

On Tuesday, U.S. District Judge Nancy Atlas, who accepted the guilty plea, stated that the idea that a banker takes money out of someone else’s account without authority must be sanctioned and handed Ibarra a sentence of 33 months in federal prison to be immediately followed by five years of supervised release. Defendant was not ordered to pay a fine. He was further ordered to pay $779,000 in restitution.

Ibarra worked at JP Morgan Chase Bank in Houston. He admitted that while employed there, he purchased or caused to be purchased $779,000 in cashier’s checks on accounts owned by a person from Nigeria. This person was deceased at the time of the defendant’s actions and Chase was not advised of his death. The defendant admitted he acted fraudulently and without authority.

The cashier’s checks were all made payable to “Ben Leasing.” Ibarra admitted he caused another individual to obtain a certificate of operation under the assumed name of Ben Leasing from the County Clerk of Harris County and open a bank account in that name. However, that person refused to accept the cashier’s checks and Ibarra then re-deposited the checks at Chase. He further caused eight more cashier’s checks to be purchased in various amounts, payable to different individuals with whom Ibarra had a relationship. Three of these checks were subsequently exchanged for identical Chase cashier’s checks. All of the Chase cashier’s checks were deposited into different bank accounts in Houston.


Read the whole story here.

Former Sheriff's Deputy In Illinois Indicted For Allegedly Embezzling $100K+

From on 1/21/2015:

A former McLean County sheriff's deputy was indicted Wednesday on felony theft charges alleging he stole more than $100,000 from the deputies' police union.

Jay Hobson, 36, of Bloomington faces two counts of theft over $100,000 in which he is accused of taking money from the union between Nov. 2, 2011, and July 28, 2014. He resigned Aug. 15, 2014, shortly after the money was reported missing.

Hobson was booked into the jail late Wednesday afternoon after he turned himself in. He was jailed in lieu of posting $10,025.

Sheriff Jon Sandage, who was elected in November, said Wednesday the charges against Hobson, who worked for the department for 12 years, are unfortunate but not a reflection on the department's 54 sworn officers.

"The majority of our officers realize that someone who does things that gives police a black eye has no business in police work. Every good police officer knows they are held to a higher standard," said Sandage.

In early August, officers with the McLean County Deputies Fraternal Order of Police No. 176 discovered an alleged embezzlement that wiped out its bank account, Deputy Jeremy Bradley said last month.

"We were depleted," said Bradley, union president since January 2014.

The money was intended for a variety of charity efforts, including holiday food baskets for families at The Baby Fold. Bradley said about $4,000 was donated by people in December after a story in The Pantagraph.


Read the whole story here.

3 Arrested In $280K Embezzlement at University of Arkansas Community College Bookstore

From Arkansas Online on 1/21/2015:

Police arrested two more women Wednesday in an ongoing embezzlement investigation from the University of Arkansas Community College at Hope bookstore.

Police started investigating the embezzlement in October after the Texas Book Company Bookstore, located on the university's campus, reported more than $280,000 in cash missing, according to a Hope Police Department news release.

Brandy Harvel, 26 of Hope, and Tammy Williams, 49 of Hope, have been charged with theft over $25,000 and were taken to the Hempstead County jail Wednesday, the release stated.

Officers arrested Heather Langston, 27 of Hope, on Friday, the first suspect arrested in the case, according to the news release.

Langston was taken to the Hempstead County jail and charged with theft over $25,000, police said.
Police are still investigating the case and expect more arrests, according to the release.

Wednesday, January 21, 2015

New York Woman Sentenced For Embezzling $466K

From the Schenectady Times-Union on 1/21/2015:

Carrie LaFond, a once-trusted accountant who stole $466,000 from her employers, was sentenced Wednesday to 2 1/3 to 7 1/2 years in prison.

LaFond, 41, previously pled guilty to grand larceny and tax fraud, both felonies, for embezzling from John D. Marcella and Son Appliances & Home Entertainment.

Visiting County Judge Polly Hoye sentenced LaFond to the concurrent terms under a plea agreement reached in November. LaFond was taken into custody immediately after her sentencing.

She stole from Marcella's business account from April 6, 2011, to March 24, 2014, according to a criminal complaint.

She was caught when credit card companies inquired "as to whether a certain account should be being paid from their business account," Schenectady County Assistant District Attorney Jennifer Assini said.

LaFond, the wife of Paul LaFond, Schenectady's water and sewer department director, must repay the entire amount she stole, the prosecutor previously told reporters. She still owes $339,000 in restitution, prosecutors said Wednesday.

Connecticut Man Charged With Embezzling $808K From Municipality

From WTNH Ch.8 on 1/20/2015:

A former finance director for the town of Plymouth was charged Tuesday with embezzling more than $800,000.

David Bertnagel, 41, was arrested Tuesday morning and presented in U.S. District Court in Hartford on a charge of theft from a local government receiving federal funds. That carries a possible 10-year prison sentence.

According to the criminal complaint from the U.S. attorney’s office, Bertnagel issued 207 checks to himself from October 2011 to October 2014 totaling $808,030.

Bertnagel, who worked for the finance department for more than six years, is accused of using more than $100,000 of the stolen money to buy coins, stamps, highly sought-after Hummel porcelain figurines and other collectibles. Prosecutors said he also used embezzled funds for home improvement projects, mortgage payments and credit card bills.

Bertnagel, who lost his job in November, was released after posting a $250,000 bond. A phone call to his Thomaston home seeking comment Tuesday went unanswered.

According to the complaint, Bertnagel told the FBI that he had been authorized by former Mayor Vincent Festa and former mayoral assistant Theodore Scheidel to make early draws on his pension.

In November, his lawyers provided a photo copy of the paperwork to the town, which turned it over to the FBI.

There is no record of such a contract in City Hall, according to the complaint.

Festa told authorities he didn’t recall any such agreement and doesn’t believe it occurred. Scheidel is deceased.

According to the complaint, the FBI discovered an electronic copy of Festa’s signature on Bertnagel’s computer which appears to be “very similar” to the one on the purported contract.


Read the whole story here.

Florida Woman Charged With Embezzling $190K From Bank

From WJAX-TV 47 on 1/20/2015:

According to documents Action News obtained from U.S. District Court, Margaret Miller, also known as Peggy, had intent to defraud EverBank. The documents say that from November 2013 to May 2, 2014, Miller willfully embezzled approximately $190,000 in cash from a vault.

Read the whole story here.

Tuesday, January 20, 2015

Former CFO of Ohio-Based Fast Food Concern Accused of Embezzling $3.3 Million

From ABC Ch. 6 on 1/20/2015:

A Midwest burger chain has accused one of its former workers of having sticky fingers after investigators discovered $3.3 million missing from the company's books.

Frisch's Restaurants Inc. claims Michael Hudson, a former assistant treasurer, forged payroll documents and created fake accounting entries to divert funds into his personal accounts over several years.

Frisch's is seeking restitution and has filed a lawsuit against Hudson, WCPO reported.

"While we were saddened to learn of these unlawful and fraudulent acts carried out against the Company by a trusted and long-time employee, we took swift action as soon as we discovered the fraud," said Craig Maier, Frisch's Chief Executive Officer, in a regulatory filing to investors. "As a precautionary measure, the Company is implementing an additional layer of checks and balances in our accounting systems to protect against this type of fraudulent behavior in the future."

Frisch’s told investors that the fraud is not likely to force a restatement of net income for the fiscal years 2012 through 2015.  It did not explain how the fraud was discovered.

"Our employees and shareholders can take pride in the Company's 67-year history of success and its well-deserved reputation for integrity and responsibility," Mr. Maier added. "We can assure them that we will devote as much of our human and financial resources as are necessary to conclude this episode promptly and efficiently.”


Read the whole story here.

Update (1/22/2015): Frisch's stock price dropped about 1% in the wake of the embezzlement scandal.

Northern Michigan County Experiencing Rash of Embezzlement Cases

From on 1/20/2015:

The Ontonagon County Prosecutor's Office is currently handing three separate embezzlement cases.

The first is against Amy Truscott of Ontonagon. The embezzlement allegedly happened while Truscott was a partner with Roger's Insurance. She allegedly took premiums in early 2012. She has been arraigned for embezzlement of $100,000 or more. Truscott will be back in court for a preliminary hearing on February 2.

The second case is against Noah Arble of Ontonagon. Arble is charged with embezzlement as an agent or trustee of $20,000 or more but less than $50,000. This allegedly happened between September 2012 and February 2014, while he was treasurer of the local Habitat for Humanity. Arble's preliminary hearing is also set for February 2.

A third suspect is still awaiting arraignment. This person allegedly embezzled funds from Aspirus Physical Therapy Center. Their name and further details will be released after formal arraignment of charges. That is expected to be done on January 26.

Monday, January 19, 2015

Washington State Man Sentened For Embezzling Nearly $500K From US Foodservice Corp.

From the Bonney Lake Courier-Herald on 1/17/15:

The former Vice President of Finance for the NW Division of US Foodservice was sentenced today in U.S. District Court in Tacoma to 30 months in prison, three years of supervised release and $496,845 in restitution, announced Acting United States Attorney Annette L. Hayes.

JASON A. GREEN, 37, of Puyallup, Washington, conspired with his friend, Jimmie Dillingham, to steal from GREEN’s employer, US Foodservice.  GREEN pleaded guilty to mail fraud, resulting in a loss of nearly half a million dollars to US Foodservice, in November 2013.

In November 2014 Dillingham pleaded guilty to mail fraud and will be sentenced later this year.  At the sentencing hearing U.S. District Judge Ronald B. Leighton told GREEN, “This offense is serious, it tears at the fabric of society . . . [it is the type of offense that] has a corrosive effect on people who didn’t have your opportunity.  You were blessed.  I can’t see the motivation.”

According to records in the case, beginning in July 2009 and continuing until late 2010, GREEN and Dillingham made up phony invoices indicating that Dillingham’s company had done work for US Foodservice.  GREEN abused his access to payment systems at the company to approve expenditures for work that was never done.  GREEN changed computer codes in the accounting records to conceal the fraud.
In one part of the scheme, the men invented a security company and submitted phony bills for work it allegedly did at a Clark County warehouse.  GREEN used his access to US Foodservice accounts to cancel the contract with a legitimate company and instead steered the business to Dillingham’s company.  The warehouse property was later sold.  After the men submitted the invoices for payment, Dillingham would deposit the checks and share the funds with GREEN.  Both men gambled significant amounts of the embezzled money at area casinos.
In December 2010, the company tried to untangle shortfalls in various accounts and GREEN quit his job when confronted about fraudulent entries in the books.  The company notified law enforcement which began the financial investigation.
Read the whole story here.

Huge Embezzlement Alleged From Hospital Construction In Canada

From the Toronto Sun on 1/17/15:

The former head of Canada's spy oversight body will be extradited from Panama according to QMI's sister TV station TVA.

Arthur Porter, the former head of the Security and Intelligence Review Committee, was arrested by Panamanian police in May 2013 at the request of Canadian authorities and has been imprisoned there ever since. Along with his partner Yanai Elbaz he is accused of embezzling $22.5 million from the construction of a hospital in Montreal during his time as head of the McGill University Health Centre.

The Montreal police's anti-corruption unit would not confirm the report.

It's unknown when Porter may be sent back to Canada."‹