California Woman Pleads Guilty To Embezzling $400K From Danielle Steel

Kristy S. Watts, aka Kristy Siegrist, 47, of San Rafael, California, has pleaded guilty to federal charges she embezzled some $400,000 from novelist Danielle Steel, for whom she worked as a bookkeeper for 15 years handling payroll and accounting and coordinating household and travel expenses. According to a lawsuit filed by Steel against Watts, it is alleged that Watts embezzled as much as $2.7 million. Watts pleaded guilty to one count of wire fraud and four counts of tax evasion. Under the plea agreement, Watts will be sentenced to 31 months in prison and must pay restitution. According to prosecutors, the scheme lasted from 2003 to 2008. Watts allegedly manipulated the payroll to pay herself more than her salary, wrote blank checks for cash for her own benefit and misused company credit cards.

Read the story here and here.

Pennsylvania Woman Charged With Embezzling $800K

Peggy Burton of Brookville, Pennsylvania has been charged by local police for embezzling some $800,000 from an unnamed credit union for whom she had been employed. Burton allegedly stole the money "because she did not want to lose her cars." Details have not yet been released although it has been reported that she forged an attorney's signature on checks meant for the credit union.

Developing...

Massachusetts Woman Indicted In $200K Embezzlement Case

Jennifer St. Clair, 37, of Freetown, Massachusetts has been indicted on state charges she embezzled some $200,000 from an unnamed New Bedford-based produce distributor for which she had been employed as an accounts receivable collector. According to the Massachusetts Attorney General's office, St. Clair stole "large amounts" of cash from daily receipts of cash and checks that she was supposed to prepare for deposit into company accounts. The scheme, which lasted from July 2006 to October 2008, also involved her alleged making of false entries in the books and records in an effort to conceal her actions. Specifically, St. Clair was indicted on 3 counts of falsifying corporate books and one count of larceny over $250 by continuous scheme.

Read the story here and here.

Read the Mass AG's announcement here.

Update (3/12/11): St. Clair, now 39, was sentenced to one year in prison. She was also ordered to pay full restitution in the amount of $204,400 to Sid Wainer & Son, a local produce distributor where she had been employed for 15 years as an accounts receivable collector.

Update: Former Oklahoma Sports Association Exec Pleads Guilty To $450K Embezzlement Case

Danny Lynn Rennels, 58, of Verden, Oklahoma, pleaded guilty yesterday to embezzling $457,500 from the from the Oklahoma Secondary School Activities Association (OSSAA), where he had served as executive director. Rennels was arrested two weeks ago and charged with embezzlement. Last March, Rennels was fired from OSSAA, which regulates high school sports in Oklahoma. Under the plea agreement, Rennels must repay $421,500 in restitution as some of the money has already been recovered. He had served as executive secretary for nearly ten years. According to prosecutors, Rennels' embezzlement began in or about September 1, 2005 and continued until March, when he was fired. Rennels reportedly has a severe Internet gambling habit.

Read FraudTalk's earlier post on this story here.

Read the story here.

Illinois Bookkeeper Pleads Guilty In $266K Embezzlement Scheme

Mary R. Storer, 40, of Wood River, Illinois, pleaded guilty to embezzling $266,056 from Elk Heating and Cooling, a local business for which she had been employed as office manager and bookkeeper. According to prosecutors, Storer's scheme began in 2006 shortly after she was hired by the company by having manager's sign stacks of checks, some of them blank, ostensibly to pay for office supplies, which she then cashed. She also took cash payments from clients, promising a discount on their invoices. Finally Storer manipulated the payroll such that she would take employee withholdings for retirement and vacation time. Specifically, Storer pleaded guilty to tax evasion, willful failure to file federal income tax returns, embezzlement from an employee benefit plan and failure to pay employment taxes. Her thefts were reportedly motivated by a gambling habit. She faces up to 16 years in prison.

Read the story here, here and here.

Read the DOJ announcement here.

New Hampshire Woman Arrested In $700+K Embezzlement Scheme

According to FraudTalk sources, Julie Ann Garrow, 44, of Alstead, New Hampshire, has been arrested by federal authorities for allegedly embezzling some $711,000 from a Vermont-based family-run graphics shop where she had been employed as a bookkeeper for 14 years. Commencing shortly after she was hired, it is believed that Garrow essentially wrote checks to herself from company accounts by forging one of officer's signatures. Garrow was fired last year when the owners discovered discrepancies in the company's books and records. Garrow is believed to hail from Langdon, New Hampshire. The thefts from the small business caused such severe financial distress that nearly half a dozen workers had to be laid off in recent years, including Garrow's own husband, sources said.

Update 1: The story has now been published here.

Update 2 (3/30/10): Garrow has reached a plea agreement to plead guilty to one count each of forgery with intent to defraud and filing a false tax return. As part of the plea agreement, Garrow must pay $607,739 in restitution to Vermont Graphics, her former employer, and $81,325 to the IRS for unpaid taxes. Read the story here.

Update 3 (4/30/10): Garrow pleaded guilty this past Wednesday to two additional felony counts of uttering a forged instrument and making a false statement on a tax return. Read the story here.

Update 4 (12/10/10): Garrow was sentenced to 2 years in prison, plus 3 years probation. She must also pay restitution. Read the updated story here and here.

Idaho Man Admits $600K Embezzlement

Jerry Warren Gunstream, 60, of Nampa, Idaho and a real estate broker, reportedly admitted that he had embezzled nearly $600,000 from eight properties he dealt with while working as a Caldwell Banker franchisee. Gunstream is also being sued civilly by an Oregon-based company alleging that he owes them $125,000. He has reportedly been under investigation by the Idaho State Police for several months now.

Read the story here and here.

Update (1/29/12): Gunstream, now 62, has been formally charged with embezzling $598,000 from 8 properties he managed through his franchise of Coldwell Banker Commercial. According to reports, Gunstream admitted in a 2009 letter to Caldwell Banker, that he misappropriated the monies over a period of at least a year, from June 2008 through July 2009. Gunstream reportedly told police that he would electronically transfer money out of the tenants’ accounts on an “as needed” basis to cover his own expenses because his income from real estate sales had declined. Gunstream filed for personal bankruptcy in December 2010. He has been charged with two counts of felony theft of more than $400,000.

Oregon Postal Worker Pleads Guilty In $156K Embezzlement Case

June Marie Newburn, 50, of Joseph, Oregon, pleaded guilty yesterday to embezzling $156,462.59 from the US Postal Service in Bend, Oregon, where she had been employed for 23 years. According to prosecutors, Newburn stole money orders, cash and other property for her own use, between October 31, 2005 and July 1, 2007. Specifically, Newburn plead guilty to one count of theft of government property and faces up to 10 years in prison, plus a fine and restitution.

Read the story here and here.

Former Oklahoma High School Sports Association Exec Charged In $450K Embezzlement Case

Danny Rennels, 58, of Verden, Oklahoma, was charged with embezzling $457,500 from the Oklahoma Secondary School Activities Association (OSSAA), where he had served as executive director. Last March, Rennels was fired from OSSAA, which regulates high school sports in Oklahoma. He had served as executive secretary for nearly ten years. According to prosecutors, Rennels' embezzlement began in or about September 1, 2005. Rennels reportedly had an Internet gambling habit.

Read the story here, here and here.

Update: Silicon Valley Venture Capitalist Sentenced In Securities Fraud Case

William "Boots" Del Biaggio III, 42, of Menlo Park, California, was sentenced to more than 8 years in prison for defrauding investors out of millions, in part, to purchase a professional hockey team franchise. Last February, Del Biaggio pleaded guilty to one charge of forging financial documents to obtain $110 million in loans from several banks and wealthy individuals. Prosecutors alleged that he used the money to purchase a controlling interest in the Nashville Predators. Del Biaggio is quoted as telling the court, "I'm incredibly sorry. I can't begin to express how sad and ashamed I am...I'm losing sleep, and I'm scared and I truly understand what the victims are going through."

Read FraudTalk's earlier posts on this story here and here.

Read the story here and here.

Boo hoo hoo...

FBI Releases Crime Statistics

The Federal Bureau of Investigation released its 2008 Report on Crime in the United States. FBI statistics show a 1.6 percent rise in "property crime" which includes fraud, theft and embezzlement, of 1.6.

See the full FBI Report here.

Former Maryland Postal Clerk Sentenced In Fraud & Embezzlement Scheme

Lorita M. Frazier, 48, of Randallstown, Maryland, was sentenced to three years in prison after being convicted of fraud and embezzlement from the US Postal Service where she had served as a clerk. Frazier had been convicted in June for embezzling postal funds, bank fraud and wire fraud. According to prosecutors, Frazier stole some $74,000 in bank deposit funds from the post office between October 2004 and June 2005. She also reportedly defrauded the Post Office Credit Union of Maryland and the Option One Mortgage Corp. by using fraudulent financial information to obtain loans used to purchased 2 Porsche automobiles and refinance her home, among other things.

Read the story here and here.

Read the DOJ announcement here.

Update: Former Illinois Municipal Treasurer Sentenced In Embezzlement Conspiracy

Linda Cannon Connor, 54, of Belleville, Illinois, was sentenced to 3 years in prison for her role in an embezzlement conspiracy that bilked the village of Washington Park out of $369,587, where she had been employed as Treasurer and mayor's assistant. Specifically, Connor was sentenced to two consecutive three years terms for filing a false income tax return and 36 months for theft from the municipality. Connor had been indicted last March on charges of misapplication of property and filing a false tax return. According to prosecutors, Connor "influenced" former Washington Park payroll clerk Dorothy Richardson Triplett, in her theft of an additional $144,038 from the municipality. Triplett was sentenced in March to 18 months in prison. The village was forced to file for bankruptcy in July, partly as a result of the thefts. At her sentencing, Connor reportedly apologized to everyone, including the court, the municipality, her family and her church, saying, "I apologize to anybody who was hurt because of my actions. I am sorry for being naive and stupid. I ask for mercy from the court."

Read FraudTalk's earlier posts on this story here and here.

Read the story here, here and here.

Read the DOJ announcement of Connor's indictment here.

Update: Kansas Embezzler Sentenced In $2.6 Million Case

James W. Foremsky, 62, of Topeka, Kansas and the former Chief Financial Officer of Emporia, Kansas-based Vektek Inc., was sentenced to 57 months in prison for embezzling some $2.7 million from the company. Foremsky plead guilty last March to one count of wire fraud and his wife, Susan Foremsky, 57, plead guilty to one count of accessory after the fact in connection with the embezzlement. Susan received a sentence of 24 months in prison. They must also pay full restitution. According to prosecutors, the couple admitted to embezzling the funds between June 1995 and November 2007 and using it to maintain a lavish lifestyle that included expensive vacations, vehicles and horses.

Read FraudTalk's earlier posts on this story here and here.

Read the story here and here.

Alabama Woman Pleads Guilty In $1.2 Million Embezzlement Case

Kimberly Lynn Perrin, 40, of Birmingham, Alabama, pleaded guilty to federal charges of health care fraud, wire fraud, and tax fraud in connection with her alleged embezzlement of some $1.2 million from the Simon-Williamson Clinic in Birmingham, where she had been employed as company controller. According to prosecutors, Perrin misappropriated the funds over a 3 year period between 2005 and 2008, by causing checks to be issued to her and others for her own personal use. She faces up to 35 years in prison.

Read the story here.

Read the DOJ announcement here.

Update (3/11/10): Perrin, now 41, was sentenced yesterday to 30 months in prison for embezzling $1,197,074 from the the Simon-Williamson Clinic where she had been employed as controller.

New York Man Ordered To Pay $2.7 Million Restitution

Robert C. Piscitello, 48, of Tonawanda, New York, was ordered by a state court judge to repay some $2.7 million to International Chemical of Amherst, New York where he had previously been employed. International Chemical had filed a civil suit against Piscitello alleging that he had embezzled the funds which he denied. Nevertheless, Piscitello spent 2 years in prison for not paying taxes on the allegedly stolen money.

Read the story here and here.

Former California School Administrator Pleads Guilty To $422K Embezzlement

Leonard Eugene Robinson, 52, of Fresno, California, pleaded guilty yesterday to charges he embezzled some $422,000 from the Orange Center School District where he had been employed as business manager. According to prosecutors, Robinson's thefts occurred over a 3 year period between October 2005 and January 2009. He admitted to writing checks to himself from school district accounts and hid the thefts by controlling the books and records. Specifically, Robinson plead guilty to grand theft and burglary charges and now faces up to six years in prison. The burglary charge was the result of Robinson allegedly taking a school district computer's hard drive in an attempt to remove evidence of his actions. Robinson's attorney, Glenn LoStracco, blamed his actions on a gambling addiction. Robinson, has was also ordered to pay $422,000 in restitution, has now filed for bankruptcy, according to his lawyer. Robinson had been employed for 21 years by the school district.

Read the story here, here and here.

Update: Robinson was sentenced to 3 years in prison on March 2, 2010.

Connecticut Woman Pleads Guilty To Embezzling $700K

Melissa A. Laliberte, 39, of Wallingford, Connecticut, pleaded guilty last week to embezzling $743,768 from the now-defunct Meriden Franco-American Federal Credit Union, where she had been employed as a bookkeeper. Specifically, Laliberte pleaded guilty to one count of embezzlement from a federal credit union, and one count of filing a false income tax return. Prosecutors had also alleged that Laliberte had falsified bank records to cover her tracks during the period of her thefts, which occurred between 2004 and 2008. The credit union has since shuttered it's doors. She faces up to 30 years in prison, plus fines and restitution. Sentencing is scheduled for next January 12th.

Read the story here and here.

Read the DOJ announcement here.

Update: Arizona Museum Accountant Sentenced In $970K Embezzlement Case

Ruth Ellen Sons, 62, of Tucson, Arizona, was sentenced to 5 years in jail for embezzling $973,000 from the Tucson Museum of Art where she had been employed as an accountant since 1990. Prosecutors alleged that Sons had embezzled the funds over a period of 5 years, from 2003 and 2008, wherein she stole cash receipts from the museum gift shop meant for deposit and attempted to cover-up the thefts by manipulating the books and records. Sons was arrested last may and charged with 7 felony counts including fraud, theft and conducting an illegal enterprise. She plead guilty last month to one count of theft and one count of fraud and was ordered to pay full restitution. According to her daughter, Carrie Hoover, Sons was motivated to steal because she has a gambling problem.

Read FraudTalk's original post on this story here.

Read the story here.

Update: Former Non-Profit Exec Sentenced In $550K Misappropriation Case

Anna Marie Naukam, 51, of Edmond, Oklahoma, pleaded guilty last Friday to misappropriating more than $550,000 from the Oklahoma Court Appointed Special Advocates Association for which Anna Marie had served as Executive Director. As part of her plea agreement, Naukam was ordered to spend 15 years in prison, 20 years on probation and pay $549,024 in restitution. She offered no apologies at the hearing. Specifically, Naukam pleaded guilty to one count of conspiracy count and 148 counts of embezzlement. She had served as the executive director of the institution, which received taxpayer funding, for almost 10 years before being terminated last October. She and her husband, Eugene M. Naukam III, 64, who was also employed by the association, were indicted last month. Eugene Naukam is still facing his charges. A state auditor has alleged that the Naukam's misspent at least $650,000 in association funds. They used the funds to support a lavish lifestyle and to pay for personal expenses, including college tuition for a family member.

Read FraudTalk's original post on this story here.

Read the story here.

Update: Former Oklahoma Tribal Leader Sentenced In $107K Embezzlement Case

Emily Anne Saupitty, 53, of Apache, Oklahoma, the former tribal treasurer for the Apache Tribe, was sentenced last week to 27 months in prison for embezzling more than $107,000 from the tribe. Saupitty was convicted last December on 33 fraud counts of embezzling tribal funds. She used the money for personal expenses, including travel and a computer as well as to "spread money around to gain political support as she ran for tribal offices,” according to prosecutors. Between 2003 and 2004, Saupitty deposited 8 checks from tribal funds into her own bank account amounting to $107,627.65.

Read FraudTalk's original post on this story here.

Read the story here.

Update: Former Vermont Town Clerk Pleads Guilty In Embezzlement Case

Suzanne K. LaBombard, 50, the former town clerk and treasurer for the town of Isle La Motte, pleaded guilty to charges she embezzled more than $100,000 from town coffers. LaBombard had originally plead not guilty to the five felony counts last December. Her plea agreement in this case calls for her to serve 30 days to a year in prison and to repay $100,000 in restitution. Formal sentencing will be made in November. Her father, a member of the town select board, is reported to have repaid the town $150,000 on her behalf when the charges surfaced in March 2008.

Read FraudTalk's earlier posts on this story here and here.

Virginia Woman Pleads Guilty To Embezzling $750K From US Navy

Glenda Roberts, 49, of Virginia Beach, Virginia, pleaded guilty to charges she embezzled some $750,000 from the Navy Exchange at Naval Amphibious Base, Little Creek, Virginia, where she had been employed as an accounting manager. According to prosecutors, Roberts created bogus invoices from phony companies and submitted them to the Navy Exchange for payment, and using the funds to pay personal expenses. Specifically, Roberts pleaded guilty to one count of Theft of Public Property. The scheme lasted for 7 years from 2001 to 2008. Sentencing is schedule for December 7, 2009.

Read the story here and here.

Former Texas Accounting Supervisor Indicted In $3.6 Million Embezzlement Scheme

Diana E. Simon, 49, of Sugar Land, Texas, was indicted earlier this week for allegedly embezzling more than $3.6 million from Kaneka Texas, a chemical company and a subsidiary of Kaneka Japan, based in Pasadena, Texas, where she had been employed as an accounting supervisor. According to prosecutors, Simon's scheme was perpetrated between June 2006 and February 2008, wherein she manipulated vendor invoices and caused $3,621,220 to be transferred into her own personal bank account. Simon reportedly used the embezzled money to buy a luxury home, luxury vehicles, jewelry and financed multiple gambling trips to Louisiana and Las Vegas. A trial is set for October.

Read the story here and here.

Read the DOJ announcement here.

Ponzi Schemes - The Warning Signs

The age old Ponzi Scheme still pervades the American white collar crime scene, with the elderly becoming more and more the focus of the scam. Here are some simple tips on how to spot one and warning signs which may tip you off.

Ponzi?
The Ponzi Scheme, also sometimes referred to as a pyramid style scheme which fall into the same category, are named after famed American swindler Charles Ponzi who developed the scam in the 1920’s. The basis of the scam is to pay initial investors with the proceeds earned from the newest investors, thereby operating on the “rob-Peter-to-pay-Paul” principle. Investors continue to grow in numbers until the system can no longer support itself and falls apart, but not before a healthy profit is gleaned off the top by the perpetrator.

Still Happening
According to the Securities and Exchange Commission the fraudulent investment opportunities are still quite common and continue to trick investors and the FBI has investigated more than two dozen large Ponzi style scams since the beginning of 2009 alone.

Spotting a Scam
So the question may be posed: Why are people still falling for such obvious scams? The answer is a little more complicated than just spotting a poor investment opportunity. Nowadays the scams are being dressed up to resemble legitimate business investments and even the occasional savvy investor can be caught off guard.

Signs to watch for:

1. It’s too good to be true
   If the investment just sounds like the return is too great or too easy then that red light should already be blinking in your mind. One of the best ways to spot and stay out of a Ponzi style pyramid scam is to listen to your gut. If things just don’t feel right or sound too easy that may be a signal of foul play.
   
2. Pay attention to the details.
   Details to any investment should be of paramount interest, especially if you’re planning on plunking down your hard earned cash. Hazy speculations and non-distinct specifics help cloud these scams in shadows. If every step of the formula isn’t completely clear those lights should be flashing again and you probably shouldn’t make the investment. Remember, a well informed investor is a protected investor. Every investment may carry an inherent risk, but if you know the exact risks you can more accurately decide whether you want to take them. Investing without knowing specific risks is like jumping out of a plane with a backpack and simply hoping there is a parachute inside instead of checking!
   
3. You suddenly are a recruiter.
   Remember that these types of scams require a high number of recruits in order to work. While most real business investments have specific financial goals that they have to reach, the Ponzi scam will simply need more capital. If you find yourself being aggressively encouraged to recruit new investors you may want to rethink the ‘opportunity.’
   
4. Stalling or guarantees of huge returns.
   If you are guaranteed huge returns that should be one of the biggest light bulbs of all! Remember that investing always involves some risk, no matter how perfect the investment. Anyone who outright promises to pay you a massive return may be exaggerating the truth. If you decide to end your investment and find you are stalled when you try to get your funds back it may be time to alert the authorities.

This post was contributed by guest blogger Courtney Phillips, who writes about the list of worlds best universities. She welcomes your feedback at CourtneyPhillips80 at gmail.com.

Former Pennsylvania Executive Charged With $2.3 Million Embezzlement & Tax Evasion Scheme

Richard E. McDonald, 36, of Leechburg, Pennsylvania, and the former CEO of World Health Alternatives, Inc. , has been charged with embezzling some $2.3 million from the company by skimming payroll taxes. McDonald has also been charged with tax evasion as part of a 20 count indictment recently unsealed. McDonald's scheme, which reportedly occurred between 2003 and 2005, caused the company stock to precipitously decline when it was publicly revealed in August 2005, resulting in shareholder losses of some $200 million. World Health Alternatives subsequently filed for bankruptcy and its assets were purchased. McDonald faces up to 30 years in prison. He is due to be arraigned tomorrow.

Read the story here and here.

Nebraska Bookkeeper Pleads No Contest In $700K Embezzlement Case

Teresa Kirwan Erickson, 61, of Atlanta, Nebraska, pleaded no contest to 5 of 16 counts of theft by unlawful taking for embezzling some $700,000 from Charles Sargent Irrigation of Holdrege, Nebraska, for which she had been employed as bookkeeper for 28 years. Erickson was also ordered to pay restitution in the amount of $126,489.35 as part of the plea agreement. The thefts reportedly occurred between December 1999 and October 2008. Erickson was originally arrested and charged with the thefts last April.

Read the story here and here.