Thursday, September 30, 2010

Former Pastor In Ohio Found Guilty In $1 Million Embezzlement Case

David A. Thompson, of Canal Winchester, Ohio and believed to be in his late 40s, was found guilty today of embezzling more than $1 million from his church, The World of Pentecost Church in Columbus, where he had served as pastor. Specifically, Thompson was found guilty on charges of theft, money laundering and tampering with records by a Franklin County Common Pleas judge. Prosecutors alleged that Thompson misappropriated funds from the church over a 9 year period from 1998 to 2007. He was charged with the thefts in 20 felony counts in late February 2009 and was alleged to have stolen funds from the church's building and assistance funds which he spent to support a lavish lifestyle, including expenditures on luxury cars, a pool, a boat and hair treatments. Thompson became pastor in 1995. He faces nearly 90 years in prison upon sentencing, scheduled for December 1, 2010.

Read the story here , here and here.
Update (12/2/10): Thompson was sentenced yesterday to 5 years in prison and must pay $733,000 in restitution.

Athletics Director For South Carolina High School Charged With Embezzling $135K

Bryan Butz, 46, of Batesburg-Leesville, South Carolina, has been charged with embezzling $135,596 from the White Knoll High School, where he had served as athletics director. According to authorities, Butz misappropriated the funds from an expenditure account meant to pay for sporting equipment, travel and jerseys. Among other things, Butz allegedly used a school debit card for the account to withdraw cash which he used for his own benefit. He became the athletic director in 2006 and was paid a salary of $80,000. According to authorities, Butz' thefts spanned more than a four year period, from June 2006 until September 2010.

Read the story here, here and here.

Watch a video on the story here.

Wednesday, September 29, 2010

Update: New Mexico Man Avoids Criminal Trial After Alleged $140K Embezzlement & Arson

Martin Glen Pyke, 44, of Socorro, New Mexico, reached an agreement with authorities to enter into a Pre-Prosecution Diversion program after he was accused of embezzling nearly $140,000 from the Fraternal Order of Eagles Club of Socorro where he had been served as gaming manager. Pyke allegedly set fire to the building in an attempt to cover up the thefts. Pyke allegedly misappropriated from the club from June 2005 until March 3, 2006, when he reportedly attempted to burn it down. As part of the agreement, Pyke must pay $137,828.55 in restitution and must maintain undisclosed terms of a probation. He was originally charged in February 2009 with eight felony embezzlement counts, one second-degree count of arson, two third-degree felony tampering with evidence charges and eight fourth-degree felony reporting and record violations related to gaming machines at the club. Pyke reportedly has a history of financial problems and a gambling habit.

Read FraudTalk's earlier post on this story here.

Read the story here and here.

Former Credit Union Exec In Western Massachusetts Pleads Guilty To Embezzling $225K

Robert W. Koss, 72, of Ludlow, Massachusetts, pleaded guilty yesterday to charges he embezzled $225,000 from the Western Massachusetts Electric Co. Credit Union which he had managed for 30 years. According to prosecutors, over a period of at least 7 years, from at least 1999 until his retirement in 2006, Koss submitted fraudulent expense reports, either inflating or inventing them. Koss pleaded guilty to embezzlement and filing a false tax return and has agreed to pay about $130,000 in restitution - he has already paid back about $80,000. Koss is scheduled to be sentenced on January 21, 2010 and faces up to 33 months in prison. Read the story here and here. Update (3/29/11): Koss was sentenced to just four years probation.

Former Postmaster In Oklahoma Pleads Guilty To Embezzling $624K

James E. Draheim, 63, of Elgin, Oklahoma, pleaded guilty yesterday to charges he embezzled $642,808 from the Elgin, Oklahoma Post Office where he had served as Postmaster. According to prosecutors, Draheim misappropriated the funds over a period of about four years, from October 2005 to September 2009. As part of the plea agreement, Draheim pleaded guilty to theft of public funds and filing a false tax return and must repay the $624,808 he stole. Prosecutors alleged that he took money from postal customers for bulk mailings but did not fully credit their accounts, misappropriating the remainder. He faces up to 10 years in prison, plus a fine of up to $250,000 and additional restitution to the IRS for taxes owed from 2005 through 2009.

Read the story here and here.

Tuesday, September 28, 2010

Former Fire Department Dispatcher From Long Island Charged In $200K Embezzlement Scheme

George William Gray, 68, formerly of Glen Cove, New York and currently of Hendersonville, North Carolina, was arrested this morning and charged with embezzling $196,000 from the Glen Cove Fire Department where he had been employed for 44 years, most recently as its dispatcher. According to authorities, Gray issued some 300 checks to cash, sometimes forging the name of the department's treasurer, and used the funds to pay his personal bills. Gray has been charged with one count of grand larceny, 104 counts of criminal possession of a forged instrument, and three misdemeanor charges of official misconduct. The scheme spanned at least six years, from 2003 to 2009, according to authorities.

Read the story here and here.

Monday, September 27, 2010

Mississippi Couple Plead Guilty To Misappropriating Nearly $700K From Insurance Company

Elizabeth Rainey and Robert Rainey, of Southaven, Tennessee, pleaded guilty to charges they misappropriated $678,704.26 from Direct General Insurance Company of Memphis, Tennessee. According to authorities, Elizabeth Rainey was a claims adjuster for Direct General and issued fraudulent claims checks to herself and her husband, Robert Rainey. The scheme spanned more than four years from December 3, 2004, and March 6, 2009, according to reports.

Read the story here and here.

Hat tip: Reader Joe.

Former Financial Assistant Of New Orleans Saints Owner Charged With Embezzling Nearly $1.5 Million From 5 Companies

Charlotte Troxler, 46, of Luling, Louisiana, has been charged with embezzling nearly $1.1 million from three companies owned by Tom Benson - the owner of the New Orleans Saints, where she had served as the long-time financial assistant. According to a criminal information filed against her, Troxler wrote checks from company accounts of Benson Properties, Benson Football L.L.C., and Bensco of Louisiana, L.L.C., payable to phony and unauthorized payees, which she then deposited into her own accounts. The thefts reportedly occurred over a period of at least two years, from at least 2004 until 2006. However, the thefts could have spanned as long as 21 years, beginning in 1985, when she was first hired by Tom Benson. Troxler allegedly stole $1,066,038.45 from Tom Benson's companies. Troxler is also accused of embezzling from Leson Chevrolet Company and Ray Brandt Automobile Dealership, where she had been employed as financial controller. Troxler was employed by Leson Chevrolet for about 3 months in 2009 and Ray Brant Autos from November 2008 to July 2009. The criminal information alleges Troxler embezzled a total of $196,316.08 from Leson Chevrolet and $228,316.22 from Ray Brant Autos. Troxler owns a beauty salon, Vous Salon & Spa, located in Paradis, Louisiana, which she started in late 2005.

Read the story here, here and here.

Read the criminal information here and read the DOJ announcement here.

I wonder where the money came from to start the salon???

Hat tip: Reader Joe.

Update (11/10/10): Troxler pleaded guilty as charged in the Bill of Information. Sentencing is scheduled for March 1, 2011.

Update (4/7/11): Troxler was sentenced to 46 months in prison ordered to pay $1,066,038.45 in restitution. 

Montana Business Owner Accused Of Misappropriating $144K From Employee Benefit Plans

Michael Paul Molitor, 44, of Boulder, Montana, has been accused in two civil federal lawsuits alleging he misappropriated $144,400 from employee retirement accounts at his company, M.S. Molitor Trucking and MD Service. According to the suits, Molitor, over a period of 3 1/2 years between September 1, 2004 through March 31, 2008, failed to make deposits of funds taken from employee paychecks. Read the story here. Update (4/1/11): Molitor has been sentenced to five years probation with one year house arrest, and ordered to pay $37,891 in restitution.

Former City Manager In New Mexico Accused Of Embezzling $150K

Eva Sanchez-Bruce, believed to be in her mid-40s, of Lea County, New Mexico, has been accused of embezzling $150,000 from the municipality of Jal, New Mexico, where she had served as city manager. According to authorities, Sanchez-Bruce deposited a check for $150,000 from city coffers into her own bank account. Her lawyer reportedly claimed that the check was deposited by mistake. Two judges have had to recuse themselves from the case due to personal relationships with the defendant or her husband, Rick Bruce, who is the Lea County co-manager. Sanchez-Bruce recently resigned her position.

Read the story here and here.

Former Bookkeeper From New Jersey Pleads Guilty To $403K Embezzlement

Rebecca Leavitt Cirillo, 34, of Atlantic Highlands, New Jersey, plead guilty to charges she embezzled some $403,000 from Ansorge Unlimted, Inc., publisher of Red Bank Red Hot magazine where she had been employed as a bookkeeper. According to prosecutors, Cirillo wrote 326 checks to herself, siphoning off funds over a period of more than 2 years, from July 2005 through November 2007. She also plead guilty to filing a false tax return. Cirillo, who was originally arrested in February 2009, is due to be sentenced January 14, 2011. Prosecutors are asking for a 5 year sentence.

Read the story here, here and here.

Hat tip: Reader Joe.

Friday, September 24, 2010

California Woman Arrested For Alegedly Embezzling $720K

Carmen Ascencio, 37, of Rancho Cucamonga, California, was arrested this week on suspicion she embezzled more than $720,000 from Corrections Canteen, a division of the Compass Group, where she had been employed as branch manager. Authorities were at the business conducting an unrelated investigation when Ascensio quit her job. An audit then reportedly revealed the thefts. Authorities believe that over a five year period, from January 2005 and February 2010, Ascensio caused the accounting system to issue herself extra checks and then made false entries into the system.

Read the story here.

Update (12/6/10): Ascencio was sentenced to 16 months in prison for embezzling more than $720,000 from Corrections Canteen, where she had been a branch manager.

Thursday, September 23, 2010

Embezzlement: It Can Happen To You

The Abilene Reporter-News published an article today about how common embezzlement schemes are today and what organizations can do about it. According to the article, several Abilene-based businesses, including Hendrick Health System, Cary Services, Pee Wee Jets Pop Warner Football Team and KGNZ Radio, all recently experienced embezzlements by trusted employees. The article suggests the following steps to prevent embezzlement:

  • Conduct background checks;
  • Separate accounting duties;
  • Require time off for accounting staff;
  • Require multiple signatures; and
  • Conduct surprise audits
The article also quotes Marquet International statistics from our Annual Report On Embezzlement.

FraudTalk profiled the Hendrick Health System case here.

Read the whole article here.

Former Vermont State Worker Indicted On Charges She Misappropriated Nearly $500K

Kathy J. Lantagne, 46, of Charleston, Vermont, has been indicted on charges she embezzled some $490,000 from the Vermont Department of Children and Families where she had served as a supervisor in its economic services division. According to the indictment, over a five year period between August 2004 and October 2009, Lantagne caused at least 250 checks to be issued to parties that were not owed funds and subsequently mailed them to her sister, Deborah Tuller, 54, of Newport, Vermont, who then deposited them into accounts the two controlled. They then used the misappropriated funds to pay for personal expenses. Tuller has reportedly reached a plea agreement with prosecutors in the case. Lantagne reportedly had been an employee of Vermont's Agency of Human Services, in which the Department of Children and Families lies, for 19 years.

Read the story here, here and here.

Update (10/11/10): Lantagne pleaded not guilty last week to the charges.

Update (2/18/11): Deborah Tuller, Lantagne's sister, was sentenced to 13 months in prison for her role in this embezzlement scheme. Tuller pleaded guilty to mail fraud and filing a false tax return.

Update (3/3/11): Lantagne is now expected to plead guilty, according to her attorney, Mark Kaplan.

Update (4/25/11): The Burlington Fee Press' Nancy Remsen has done a terrific spread on the Lantagne case in their current paper. Read the whole article here.

Update (6/30/11): Lantagne, now 47, has been sentenced to 33 months in prison plus three years of probation.  She and her sister, Deborah Tuller, must also pay restitution of $490,471.

Missouri Woman Indicted On Charges She Embezzled $250+K

Diana Kay Erickson, 45, of Aurora, Missouri, was indicted on charges she embezzled a total of $252,848 from two companies she had been employed at as a bookkeeper. The 16 count indictment charges Erickson with counterfeiting checks and mail fraud. It alleges that between September 7, 2006, and April 2, 2008, Erickson embezzled $219,606 from Superior Lifts, Inc. and between March 14, 2006, and December 18, 2006, she embezzled $34,242 from Goolsby Rental Properties, a related company. According to the indictment which was unsealed today, Erickson forged checks issued to herself which she deposited into her own accounts. She is also alleged to have deposited customer rent checks into her own accounts.

Read the story here, here and here.

Update (7/7/11): Erickson pleaded guilty yesterday and faces up to 23 years in prison.

Update (11/21/11): Erickson, now 46, has been sentenced to 33 months in prison. 

Wednesday, September 22, 2010

California Woman Charged With Embezzling $250K

Julie Salata, 40, formerly of Maxwell, California, has been charged with embezzling some $250,000 from the Doherty Brothers farm where she had been employed as a bookkeeper. According to authorities, Salata engaged in "suspicious transactions" that enabled her to misappropriate the funds over a period of nearly two years from January 2004 and December 2005. She has been charged with embezzlement and grand theft.

Read the story here.

Tuesday, September 21, 2010

Former Bank Exec In Utah Pleads Guilty To $200K Embezzlement Scheme

Gavin Gabriel Larkin, 35, of St. George, Utah, pleaded guilty yesterday to one count of embezzlement and misapplication of bank funds for misappropriating some $200,000 from the St. George branch of US Bank where he had served as an officer. According to prosecutors, Larkin embezzled the funds over a period of about six months, from April 2008 to August 2008, by creating a fraudulent line of credit in the name of a phony business, St. George Legal Documents and transferred the funds to a checking account he controlled and then obtained cash or cashier's checks for his own personal benefit. He faces up to 30 years in prison, plus a fine of up to $1 million and restitution upon sentencing, scheduled for December 7.

Read the story here and here.

Update (12/9/10): Larkin was sentenced to 21 months in prison, plus 5 years probation. He was also ordered to pay $192,000 in restitution.

2 NJ Union Officials Arrested On Charges They Embezzled $375K

Stephen P. Arena, 55, of Nesconset, New York, and David J. Caivano, 55, of Bloomfield, New Jersey, were arrested today on charges they embezzled $375,000 from Local 148 of the Production Workers Union where they had served as president and secretary-treasurer, respectively. According to authorities, Arena and Caivano enhanced their pay by giving themselves unauthorized salary increases, bonuses, and paid vacations. A 29 count indictment against the two men was unsealed today which alleged that the scheme spanned a four and a half year period, from July 2005 through December 2009.

Read the story here, here, here and here.

Update (6/1/12): Arena has pleaded guilty to one felony fraud count and has been ordered to pay $110,000 in restitution.  He is scheduled to be sentenced on October 2, 2012.

Green Energy Investment Fraud: Do Your Due Diligence

Last month, the Securities & Exchange Commission (“SEC”) took action against a group of boiler-room operators for running a fraudulent green energy scheme that bilked investors out of nearly $11 million. According to the SEC, the owners of Kensington Resources, Inc., two men from Southern California, 51-year old Joseph R. Porche, and 53-year old Larry R. Crowder, were behind the boiler-room operation. The scheme involved the purported sale of $11 million in unregistered shares of American Environmental Energy, Inc. ("AEEI") common stock to unsuspecting investors. Porche, Crowder and their boiler-room sales staff of four led investors to believe that the majority of investment funds were to be used by AEEI to conduct its green energy business. However, according to the SEC, the vast majority of the monies raised simply went to pay sales commissions and to finance the lavish lifestyles of Messrs. Porche and Crowder. At the end of the day, only $335,000 of the $11 million raised went to AEEI. It turns out that Crowder, and one of the boiler-room salesmen, Dale J. Engelhardt, have previous securities law offenses. In 1998, as a result of a similar fraud, Crowder was permanently barred from associating with any broker or dealer, among other censures.

With the government’s interest in promoting so called “green energy” – renewable and clean energy solutions – to support US energy demands, large public and private investments are flowing into a wide variety of startups, established companies, joint ventures and other programs to promote the sector. Sadly, the allure of green energy investments has also attracted the attention of fraudsters seeking to make a quick buck. Savvy investors would do well to do their due diligence on these opportunities in order to minimize the risk of fraud and other scams. Consider the following additional recent cases in the news:
  • In August 2010, Dorothy Geisler-Tragardh, a principal of Praxis Resources, purportedly a “clean coal” supplier, pleaded guilty to defrauding investors out of as much as $2.5 million in a fraudulent sale of its stock. Geisler-Tragardh sold shares of Praxis to investors for $56 a share when they were worth only 30 cents apiece. Instead of investing the funds, she used the proceeds to enrich herself and to pay for a luxury waterfront home and a Picasso artwork.
  • In June 2010, the SEC halted trading in shares of Green Energy Resources, Inc. as a result of its dubious claim that it would be providing 100,000 tons of “very buoyant and very absorbent” woodchips for the cleanup efforts on the Gulf Oil Spill. The SEC had also ceased trading in another company, ACT Clean Technologies, after it had made dubious claims in press releases about landing clean-up contracts.
  • In March 2010 Reuters reported that investors in Australia had been defrauded out of at least US$3.2 million by a company called WesternField Holdings Inc., purportedly a Tokyo-based “leading developer of high quality greenhouse gas reduction projects” and a carbon offset investment firm. Investors were apparently the victims of an aggressive telemarketing scam. However, claims made on the company’s web site were found to be phony, such as credentials, background, associations, certifications and awards it claimed but, in fact, did not have. Even its address in Tokyo appears to have been made up. The Australian Securities and Investments Commission took action and blacklisted the company.
  • In January 2010 notorious Canadian stock promoter, Stephen Demers, was found guilty of dozens of new fraud charges for the fraudulent sale of unregistered securities of United Environmental Energy, purportedly a green energy company. Demers had previously been found guilty of 435 securities violations in the prior five year period, according to The Montreal Gazette.
  • In November 2009, the SEC accused several individuals, including the principals of Pennsylvania-based Mantria Corp., of multiple counts of investor fraud, alleging they had perpetrated a Ponzi-type scheme which bilked mostly elderly investors out of as much as $30 million. Mantria was purportedly the “world’s leading manufacturer and distributor” of biochar, allegedly a clean charcoal energy source, as well as the developer of a “carbon negative” housing community in rural Tennessee. In fact, these claims made to investors were a complete fraud – Mantria sold no biochar, nor had it developed an eco-friendly residential community. Biochar turns out to be an unproven and potentially controversial clean energy source.

These cases and others underscore the need for proactive and thorough due diligence when considering such investments. Indeed, in December 2009, the Financial Industry Regulatory Authority (“FINRA”) issued a warning to investors about possible green energy investment scams, such as “pump and dump” and Ponzi-type schemes as noted above. FINRA provided advice to potential investors about how to avoid being scammed, including watching out for the following:

  • Unsolicited communication such as faxes, emails, text messages tweets, and strategically placed “opinions” in blogs and message boards, usually related to a very low-priced stock.
    Seminars and webinars that use short-term incentives and bonuses, along with aggressive sales tactics, to encourage you to liquidate your current savings and go “all in” on a new investment initiative.

  • Price targets or predictions of swift and exponential growth.

  • The use of facts from respected news sources to bolster claims of the size of the market for a new product or technology (“this is a billion dollar market…”).

  • Mention of associations with or actions by federal and international governments that bolster a company's product or service (“The President wants hydrogen to be part of the solution for Detroit…”).

  • References to actions by well-known companies used to justify growth of the company being touted. When a large oil company launched a “nitrogen-enriched” gas, this was quickly seized upon to validate the business prospects of a touted company, even though there was no direct link between the two.

  • Claims that they’re the next big thing. Companies that, despite having not produced any revenue to date, are purported to have a new technology that will allow it to dominate the energy marketplace. (“Company XYZ will be the Exxon of the 21st century…”)

  • Products that are only in the development stages or that claim “working prototypes” but have no actual products on the market.

  • Unverifiable claims of enormous energy efficiency.

  • Pressure to invest immediately.
FINRA advised using a healthy dose of skepticism to check out these opportunities and the people pitching them. At Marquet International, we have a simple three step process: verify, verify and verify. As can be seen in some of the examples, there were clear and in some cases glaring warning signs, such as prior history of investment fraud, opulent lifestyles of promoters, unregistered securities and non-existent offices. We recommend taking the following actions as well:

  • Check out the bonafides of the principals involved in the company in question – some may have prior histories of fraud, criminal activities or checkered backgrounds that may call into question the overall validity of the investment;

  • Double check the science – some green energy technologies remain unproven or overblown – make sure it is real and practical;

  • Talk to industry experts – get a real-time read on their reputation and track record. Other useful reference sources include other investors, suppliers, vendors and joint-venture partners;

  • Be sure company financials are audited and provided by a legitimate accounting firm – we have seen cases where fraudulent investment schemes are supported by phony or disreputable accountants;

  • Check to make sure the company and its executives are not the subject of regulatory actions – a prior history of regulatory censures is the best predictor of future actions and should raise red flags for the potential investor; and

  • Look for related party transactions and relationships – fraudulent or unsound investment schemes often involve interrelated entities.

International investments are harder to check out given the relative lack of public record, differing accounting standards and less relative regulatory oversight. Be wary of intermediaries – we have found these individuals are often disreputable who may muddy a potential investment that would otherwise be sound. Thorough due diligence in these cases often may rest on developing human intelligence sources who can provide an accurate operational and reputational analysis.

In sum, as these cases illustrate, a careful analysis of potential green energy investments will go a long way toward keeping your greenbacks working for you instead of being scammed.


Christopher T. Marquet is Chief Executive Officer of Marquet International, an investigative and security consulting firm based in Boston, Massachusetts. He can be reached at (617) 733-3304 or chris@marquetinternational.com.

Monday, September 20, 2010

North Carolina Woman Charged With Embezzling $165K In Taxpayer Funds

Phyllis Noble Waller, 51, of Tarboro, North Carolina, has been charged with two counts of embezzlement for misappropriating more than $165,000 in state and county taxpayer funds. According to authorities, Waller, as the owner of Phillips Printing & Office Supplies, was under contract with Edgecombe County and the state to collect taxes from 2002 and 2009. Over that period, she misappropriated more than $108,624.71 in North Carolina tax revenue and more than $57,366.60 in Edgecombe County sales tax revenue. She is being held in Wake County jail in lieu of a $175,000 bond.

Read the story here and here.

Former Georgia Bank Teller Pleads Guilty To Embezzling Nearly $625K

Lisa R. Cox, 48, of Macon, Georgia, pleaded guilty today to charges she embezzled $624,608 from the MidSouth Federal Credit Union where she had been employed as head teller. Authorities alleged that over a period of about six years, from 2001 until 2007, Cox misappropriated the monies and then falsified bank records in an attempt to cover her tracks. A 2007 audit revealed the missing funds. Cox reportedly spent the stolen money on luxury vacations, car payments, gambling junkets and other personal expenses.

Read the story here.

Update (1/20/11): Cox was sentenced to two concurrent 36 months prison terms, plus five years of supervised release. She must also pay restitution in the amount of $624,608.

Former Finance Manager At DC Mosque Accused Of Embezzling "Hundreds Of Thousands" Of Dollars

According to published reports, Farzad Darui, 50, an Iranian-born US Citizen of Falls Church, Virginia and the former financial manager for The Islamic Center of Washington, D.C. is being sued again in federal court for allegedly embezzling "hundreds of thousands" of dollars from the Mosque. According to the complaint in the lawsuit, Darui altered legitimate signed checks to pay vendors by changing the name to entities he "owned and/or controlled." The complaint also asserted that Darui was employed as finance manager and bookkeeper from 1994 until 2006, when he was fired. The embezzlement allegedly began in 2000 and continued until his termination. The case was brought by authorities after the Mosque brought it to their attention and Darui was indicted in June 2007. However, the criminal case went to trial, but ended in a mistrial and was eventually the charges were dropped last month. At the time, it was alleged that Darui embezzled $430,000.

Read the story here, here, here , here and here.

California Bank Manager Arrested & Charged With Embezzling $679K

Jeri Sell, 55, of Tulare, California, was arrested today and charged with embezzling $679,000 from client accounts at the Tulare branch of Citizens Business Bank, where she had been employed as a manager. According to authorities, Sell withdrew funds from several customers' accounts from 2005 to 2009 and used her position as manager to conceal her thefts from both the customers and the bank. After the scheme unravelled, Sell reportedly called one of the bank customers she stole from, leaving a voicemail, "I want to apologize, I've done some things on your account that I'm not proud of. I'm thinking of killing myself. Please call me back." Authorities believe Sell has a serious gambling problem that may have contributed to her actions. Ironically, Sell was named the Tulare "Woman of the Year" in 2008.

Read the story here, here and here.

Update (4/5/11): Sell, now 56, pleaded guilty today and is scheduled to be sentenced on May 18th.

Update (6/21/11): Sell, now 57, has been sentenced to 4 years in prison.  She was also ordered to pay as much as $1.2 million in restitution, depending upon legal, investigative and other costs associated with the matter.

Sunday, September 19, 2010

Stealing The Good Life: Rash Of Embezzlement Cases May Stem From "Me" Society, Expert Says

The Biloxi-Gulfport and South Mississippi Sun Herald published an interesting article yesterday on the topic of motivations for embezzlers. The region has reportedly suffered a "rash" of large embezzlement cases in recent years. The article which quotes various experts suggests that if someone has the characteristics illustrated by the three sides of the “fraud triangle” — opportunity, pressure and rationalization -- then that person has the propensity for embezzlement. Further, envy and a "sense of entitlement" add to the embezzlement risk. The economy also has something to do with it, according to the article. In the down economy, more people are willing to steal from their employers. However, since these cases sometimes last for years, the uptick in cases will be felt in the course of the next few years, stemming from a recession that began in late 2007. The article also asserts: "Embezzlers fit no specific profile, experts say." We disagree, as our annual reports on embezzlement have shown.

Read the whole story here.

Kansas Woman Sentenced In $130K Embezzlement Scheme

Khristi L. Anderson, 45, of Leavenworth, Kansas, was sentenced recently to six months in prison for embezzling $130,086 from the Pin Oak Apartments, a local federally subsidized residential facility where she had served as manager. Anderson pleaded guilty last year to one count of making false statements to the U.S. Department of Housing and Urban Development. According to authorities, over a period of at least two years, from 2004 through 2006, Anderson deposited rent payments into a petty cash account and then would issue a check to herself or her cleaning company. She cashed these checks and spent the money to support a gambling habit, according to the plea agreement.

Read the story here.

Saturday, September 18, 2010

California Woman Charged With Embezzling $150K From Municipality; Involved Husband & Daughter

Gloria Anna Gonzalez, 46, of Live Oak, California, has been charged with embezzling at least $147,785 from the City of Gridley, where she had been employed as a bookkeeper in the payroll department. Authorities also charged Gonzalez' husband, Vicente Gonzalez and her 20 year old daughter, Miranda Gonzalez as benefiting from the scheme. Gloria Gonzalez has been charged on 8 felony counts and one misdemeanor, including, embezzlement by a public officer, forgery, receiving stolen property and criminal impersonation. The misappropriations allegedly occurred over at least a 15 month period from January 2009 until March 2010. However, investigators believe the scheme could have been spanned years. Authorities believe Gonzalez used her access to the municipal accounting system computers to issue checks which she deposited into her own accounts and then tried to cover up her actions by voiding the checks in the system. The Gonzalez home has been searched for evidence and several new or slightly used computers were found.

Read the story here and here.

Update (10/14/10): Gloria Anna Gonzalez is now the subject of 10 additional felony counts of grand theft alleging she embezzled another $261,597.96 by issuing at least 10 City of Gridley checks which were deposited into the bank account of her other daughter, Bianca Gonzalez. Bianca's boyfriend, Jose Ramirez, also allegedly received checks issued by Gloria Anna Gonzalez.

Update (3/15/11): Gonzalez' trial is now ongoing and the total allegedly embezzled from the City of Gridley is now at $424,195.

Update (11/10/11): Gonzalez' trial was put on hold and she now faces a competency hearing on whether she can face trial.  Assuming she can, the new trial date is set for December 12, 2011.  Two doctors for the defense have evaluated Gonzalez and found that she is unable to assist in her defense, which is being challenged by the prosecutor.

Friday, September 17, 2010

Former President Of West Virginia Volunteer Fire Department Is Sentenced In $374K Embezzlement Case

Jack Micah Feltner, 41, of Oak Hill, West Virginia, was sentenced yesterday to spend from 2 to 20 years in prison for embezzling some $374,000 from the Oak Hill Volunteer Fire Department where he had served as president. According to authorities, over a period of about 6 years, from 2003 through 2009, Feltner over-billed the department for fire calls, pocketing the extra cash for himself. Feltner who was arrested in March 2010, pleaded guilty to two counts of fraudulent schemes in July.

Read the story here and here.

Former Exec Of Alaska Credit Union Pleads Guilty To $187K Embezzlement

Vicki Lynn Weidenhof, 46, formerly of Sitka, Alaska and currently of Chatsworth, Georgia, pleaded guilty to charges she embezzled $187,348 from Alps Federal Credit Union, where she had served as chief operations officer. Authorities alleged that Weidenhof transferred funds from the credit union's general ledger account into her own account and into the accounts of others.

Read the story here and here.
Update (12/17/10): Weidenhof was sentenced to 2 years in prison plus five years of probation. She must also pay restitution in the amount of $187,348.

Former Controller At South Carolina Clothing Company Pleads Guity In $600K Embezzlement Scheme

Amelia Ackerman, 55, of Mount Pleasant, South Carolina, pleaded guilty to a single felony wire fraud charge admitting she embezzled some $600,000 from Berle, Inc., a Charleston-based clothing manufacturer, where she had been employed as Controller. According to prosecutors, Ackerman diverted company payroll tax funds to her own accounts over at least a two year period, from 2006 through 2008. She was originally arrested in February 2009 and, unable to make the $150,000 bail, has been incarcerated at the Charleston County Detention Center since that time. Ackerman faces up to 20 years in prison, plus fines and restitution.

Read the story here, here and here.

Thursday, September 16, 2010

Wife Of Virginia Deputy Sheriff Accused In $500K Embezzlement Scheme

Karen Collins Wright, 44, of King William, Virginia, has been charged with embezzling more than $500,000 from Bituminous Insurance Co., where she had been employed as a bookkeeper with access to company books and check writing ability. According to authorities Wright, over a period of 10 years, misappropriated the funds from the insurance company. She has been charged with 11 counts of embezzlement. Reports suggest that Wright is the wife of King William Deputy Sheriff, Keith Wright.
Read the story here.

Update (11/16/10): Wright pleaded guilty today to charges she embezzled $524,000 from Bituminous Insurance Co. dating back to 1999.

Virginia SPCA Investigating $150K Embezzlement Case

The Norfolk, Virginia SPCA announced that a formal investigation has commenced into an alleged embezzlement of $148,022 from the non-profit organization. The case is ongoing and no details have yet been released, including the name of the suspected embezzler.

Read the story here.

Guilty Pleas Entered By Phyllis and Marla Stevens In $6 Million Aviva Embezzlement Case

William Kutmus, the attorney for Phyllis Stevens, 59, confirmed to media outlets that Stevens and her partner, Marla Stevens, will enter guilty pleas next Thursday in the case in which she has been indicted on 20 felony counts including wire fraud and money laundering for misappropriating nearly $6 million from Aviva USA where she had been employed as a compensation specialist. The charges stem from allegations that Stevens executed more than 200 transactions over a four year period transferring fraudulent agent commissions to an account controlled by both Phillis and Marla Stevens.

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

Read the story here.
Update (1/21/11): Phyllis Stevens was sentenced to 6 years in prison for orchestrating the embezzlement of more than $6 million from Aviva USA where she had been employed as a compensation specialist. Her domestic partner, Marla Stevens, was sentenced to nearly 3 1/2 years in prison for her role in the scam, which is now believed to have spanned six years.

Former West Virginia Credit Union Employee & Cohort Charged With Misappropriating $2.4 Million

Rebecca Poe, 35, of Falls Mills, Virginia has been charged with misappropriating some $2.4 million from N&W Poca Division Federal Credit Union located in Bluefield, West Virginia where she had been employed. According to prosecutors, over the course of about five years, from 2003 to August 2008 Poe used several means to misappropriate the funds, including creating false deposits which were then withdrawn for her own purposes. Poe also allegedly issued checks to family members and to pay for personal expenses. Also named in the indictment was Pamela Mullins, 46, of Bluefield, WV, an alleged accomplice, who "aided and abetted" Poe in her thefts from the credit union. Mullins, who is also a former credit union employee, was not named as a defendant. Authorities asserted that Poe's misappropriation contributed to the failure of the credit union. She faces up to 30 years in prison, plus fines and restitution. Mullins plead guilty to the Information filed against her. Poe's trial is scheduled to commence October 19th.

Read the story here and here.

Read the indictment here.

Hat tip: Reader Joe.

Michigan Church Official Accused Of Embezzling $100K

Robert G. Mathis, 64, formerly of Birch Run, Michigan and currently of Houston, Texas, has been charged with embezzling more than $100,000 from Christ Lutheran Church in Birch Run where he had served as congregation president for the past 12 years. Specifically, Mathis has been charged with conducting a continuing criminal enterprise, embezzling more than $100,000, third-degree money laundering and three counts of forgery. Authorities believe Mathis misappropriated the funds by writing checks and forging signatures. Update: Mathis has plead guilty to the charges.

Read the story here and here.

Former Fundraiser For St. John's University In New York Charged With Embezzling More Than $1 Million

Cecilia Chang, 57, of Jamaica Estates, New York, has been charged with embezzling more than $1 million from St. John's University where she had been employed as vice president for international relations and dean of the Center for Asian Studies, responsible for fundraising from Asian donors. According to prosecutors, Chang created a non-profit entity, Global Development Initiative Foundation which she represented to potential donors was part of the university but in fact she controlled solely. She then solicited funds, including a $500,000 donation from a Saudi prince, which she used to pay for her own benefit, including gambling junkets. Chang also allegedly made improper expense reimbursements from credit card charges that included her son's law school tuition at the university and other personal expenses. Chang was indicted on 205 counts including grand larceny, forgery, criminal possession of a forged instrument and falsifying business records. Chang had been employed by the university for 30 years before she was fired last January. The scheme spanned a number of years.

Read the story here and here.

Update (9/30/10): An article published in the New York Times alleges that Chang, in addition to embezzling some $1 million from St. John's University, forced students to clean, cook and act as her personal servants to keep their scholarships.

Read the updated story here.

Monday, September 13, 2010

Former School District Office Worker Accused Of Embezzling $131K

Rachel E. Heinen, approximately 30 years old, of Anoka County, Minnesota, has been accused of misappropriating some $131,000 from the North Metro School District ISD 15, in St. Francis, Minnesota. Heinen was fired from her job as human resources administrative assistant on July 29, when the misappropriation came to light. She is accused of stealing from the district's flexible spending account over more than a two year period from June 2007 until October 2009. An investigation is ongoing by authorities and Heinen is expected to be charged criminally in the matter with forgery and felony theft.

Read the story here, here and here.

Former Bookkeeper In Delaware Charged With Embezzling More Than $900K

Katie E. McCorry, 43 of Greenwood, Delaware, has been indicted on charges she embezzled more than $900,000 from Bayside Builders, a local construction company where she had been employed as a bookkeeper. Prosecutors allege that McCorry wrote numerous checks to herself and misappropriated cash over a period of more than 3 years, from January 2006 to April 2009. She has been indicted on 70 counts of forgery, 7 counts of felony theft and 3 counts of failure to pay state taxes.

Read the story here and here.

FBI Releases 2009 Crime Statistics

The Federal Bureau of Investigation released its annual crime statistics report today. The analysis indicated a 5.3 percent drop in violent crimes and a 4.6 percent drop in property crimes from 2008. In the area of property crimes, the FBI reported the following:
  • Nationwide in 2009, an estimated 9,320,971 property crimes were reported.
  • Each of the property crime offenses also decreased in 2009 when compared with
    the 2008 estimates. The largest decline was for motor vehicle thefts: a 17.1 percent decrease from the 2008 figure. The estimated number of larceny-thefts declined 4.0 percent, and the estimated number of burglaries decreased 1.3 percent.
  • Collectively, victims of property crimes (excluding arson) lost an estimated $15.2 billion in 2009.
  • By property crime offense, the arrest rate for burglary was 98.1; larceny-theft, 442.3; and motor vehicle theft, 26.8 per 100,000 inhabitants. The arrest rate for arson was 4.0 per 100,000 inhabitants.

Read the whole FBI report here.

Sunday, September 12, 2010

Former Pennsylvania Fire Academy Official Sentenced For Embezzling $168K

Robert M. Linsinbigler Jr., 55, of East Norriton, Pennsylvania, has been sentenced to 10 to 23 months in prison followed by seven years’ probation for embezzling $168,165 from Montgomery County Chiefs of Police Association and Montgomery County Fire Advisory Board. Linsinbigler had served as the director of the fire academy campus at Conshohocken from 2001 until 2009 and a county employee for some 32 years. He was charged with writing numerous checks from county coffers to pay for his mortgage, a home equity loan and other personal expenses. In testimony, Linsinbigler's wife claimed he had a drinking problem. He has reportedly been enrolled in an Alcoholics Anonymous 12-step program and has not had a drink in a year.

Read the story here and here.

Former Ohio Municipal Deputy Treasurer Sentenced For $3 Million Embezzlement

Vincent J. Frustaci, 38, of Canton, Ohio, was sentenced to 10 years in prison for embezzling nearly $3 million from Stark County, where he had served as the Stark County Chief Deputy Treasurer. Frustaci was also ordered to pay full restitution including 25 percent of any income he earns during prison and 20 percent of any income after his sentence is served. Audit investigators determined that Frustaci embezzled some $2.9 million. On June 25, 2010, authorities announced that Frustaci had plead guilty to conspiracy to defraud the US and theft concerning an agency receiving federal funds in connection with his embezzlement of $2.46 million over a six year period between January 2003 and March 31, 2009. Frustaci, who apologized for the embezzlement, blamed his actions on a gambling habit. Frustaci had been employed at the Stark County Treasurer's office since 1999, hired by his friend, current treasurer, Gary Zeigler.

Read the story here, here and here.

Arizona Woman With Prior Criminal History Has Been Charged In $500K Embezzlement Scheme

Julie Ann Blennis, 40, of Goodyear, Arizona, has been charged with embezzling nearly $500,000 from Freeport-McMoRan Copper & Gold Inc. where she had been employed as a bookkeeper. According to authorities, Blennis created a fictitious vendor in the company accounting system and then submitted "numerous counterfeit documents including false reimbursement forms and invoices over a 2 1/2-year period." Blennis was previously convicted and served prison terms in 1992 and 1996 for theft and fraudulent schemes.

Read the story here.

Former Golden Gate Bridge Worker Charged With Embezzling Nearly $100K

Jason Brewer, 34, of Rohnert Park, California has been arrested and charged with embezzling some $98,000 from the Golden Gate Bridge, Highway and Transportation District, where he had been employed as a buyer. Prosecutors allege that Brewer made unauthorized purchases and misused District credit cards for his own benefit. It is unclear over how long of a period Brewer's scheme spanned. Brewer, who had been employed by the District for 11 years, has reportedly been fired.

Read the story here, here, here and here.

Thursday, September 9, 2010

Florida Pastor Pleads Guilty To $800+K Union Embezzlement Scheme

Gregory Sims, 38, of Dade City, Florida, pleaded guilty this week to charges he embezzled more than $800,000 from the Tampa-based 1,100 member International Brotherhood of Electrical Workers Local 915 union. According to authorities, Sims, a pastor of The Crossroads of Dade City church, was employed by Antares Staffing, Inc. as a bookkeeper, which through its parent company, Medical Mutual Services LLC, had a contract manage the union's health, welfare, pension and vacation funds. Sims' responsibilities included keeping financial records, reconciling accounts and issuing checks. Prosecutors alleged that Sims issued 11 checks to the Crossroads Church totaling $813,142.17. He then allegedly used the funds for his own benefit and for the benefit of his parishioners. The thefts ocurred between November 2007 when he was hired until January 2009 when he was reportedly fired. The extent of the thefts were discovered in a June 2009 audit.

Read the story here, here and here.

Update (1/18/11): Sims was sentenced to 30 months in prison.

Wednesday, September 8, 2010

White Collar Rogues Gallery

Please check out our White Collar Rogues Gallery on the Marquet International web site. We have added a dozen new profiles and updated several others. There are some interesting common themes. If you have your own candidates for addition to the gallery, please let us know by e-mailing us at info@marquetinternational.com.

Check it out here.

Former North Carolina Sheriff Lieutenant Accused Of Embezzling Nearly $100K

Derek Jackson O'Mary, 43, of Durham County, North Carolina, has been charged with embezzling nearly $100,000 from the Durham County Sheriff's Department where he had served as a Lieutenant. According to authorities, O'Mary is alleged to have taken a total of $97,976 in county funds intended to make undercover drug busts and to pay confidential informants. O'Mary is charged with 37 embezzlement charges and one count each of obstruction of justice and cocaine possession. His scheme spanned nearly six years, from July 2003 through April 2009, according to authorities. O'Mary was fired in April 2009 after evidence was presented that he had misappropriated from the funds.

Read the story here and here.

Montana Business Reports $100K Embezzlement

The Gold and Silver Exchange of Missoula, Montana has reported to authorities that an employee embezzled at least $100,000 from the business over an 8 month period. Details are not yet available, but the police are investigating.

Read the story here.

Former South Carolina DMV Worker Charged In $300K Embezzlement Scheme

Wendy R. Gaskins, 39, of West Columbia, South Carolina, has been charged with embezzling some $300,000 from the South Carolina Department of Motor Vehicles where she had been employed as a facilities manager. According to authorities, Gaskins began misappropriating DMV funds in March 2009 and used the ill-gotten gains to make home improvements, a camper and other personal items. Authorities say Gaskins provided a written confession. She reportedly transferred monies into an account she set up for a phony construction company known as J. Creech Construction.

Read the story here, here and here.


Update (3/31/11): Gaskins state charges have been dropped in lieu of federal charges.

Washington State Cheerleader Charged In $255K Embezzlement Scheme

Pilita T. Corrales, 22, of Seattle, Washington, has been charged with embezzling some $255,000 from Steeler, Inc., a construction supply firm where she had been employed as an administrative assistant. Corrales was also a dancer/cheerleader with the Washington Stealth professional lacrosse team and was a member of the last Seattle SuperSonics dance team from 2007-2008. According to authorities, Corrales forged checks and transferred company funds to pay personal credit card and other personal vendor bills. She also allegedly made numerous unauthorized charges on company credit cards for personal use. Prosecutors allege that Corrales stole a total of $255,224 from September 2007 and April 2008. Corrales was forced to leave the company in 2009 after the thefts were discovered. Corrales has been charged with 10 counts of first-degree theft. Her actions reportedly led to layoffs at Steeler Inc.

Read the story here and here.

Former Republican Official Pleads Guilty To $840K Embezzlement

Christopher J. Ward, 41, formerly of Bethesda, Maryland, and the former National Republican Congressional Committee treasurer, pleaded guilty to charges he embezzled some $840,000 from several political committees. According to authorities, Ward transferred funds electronically or by issuing checks from committee accounts to his own account over a period of as long as four years, from 2003 until 2007. He was also accused of attempting to cover up the thefts by filing false documentation with the Federal Elections Commission. He has struck a plea agreement that would have him serve 37 months in prison.

Read the story here, here and here.

Saturday, September 4, 2010

Former Union Office Manager In Mississippi Accused Of Embezzling $110K

Mechelle Busse, aka Mechelle Singleton, 47, of Gulfport, Mississippi, was arrested this past week and charged with embezzling more than $110,000 from the United Association of Plumbers and Pipefitters Local 568 union where she had been employed as an office manager. According to authorities, over a 2 1/2 year period, from June 2005 until December 2007, Busse, a native of the Philippines, stole money, property and other assets valued at about $110,117.69. She has plead not guilty to the charges.

Read the story here.

Wednesday, September 1, 2010

Former New Jersey Law Firm Office Manager Accused Of Embezzling $1.1 Million

Beth S. Friedland, 39, of Landing, New Jersey, has been accused of embezzling more than $1.1 million from the law firm of Maloof, Lebowitz, Connahan & Oleske, where she had been employed as office manager. Friedland is accused in a civil suit of executing nearly 60 fraudulent checks payable to herself, personal vendors, and her boyfriend, Alex Cruz, who has also been named as a defendant in the case in an effort to recover the misappropriated funds. The suit claims that Friedland's scheme spanned about six years, beginning in or about 2004.

Read the story here, here and here.

North Carolina Woman Charged With Embezzling $1.2 Million Over 11 Years

Marlene Rice Hoyle, 44, of Shelby, North Carolina, was arrested and charged this morning with embezzling some $1.2 million from the Jones Family Practice, a local doctor's office where she had been employed as an office manager. According to authorities, Hoyle misappropriated the funds over an 11 year period, beginning in 1997 and continuing through May 2008.

Read the story here.

Pennsylvania Municipal Utility Worker Sentenced In $475K Embezzlement Case

Cynthia Jo Lark, 48, of Northumberland, Pennsylvania, was sentenced to one to three years in prison for embezzling nearly $475,000 from the Northumberland Sewer Authority where she had been employed as a bookkeeper. According to authorities, Lark forged the names of the utility's president and treasurer to execute payroll checks for herself. She then created a false audit to cover up the thefts. Lark, who was originally charged in March plead guilty to theft by deception and forgery charges this past June. As part of the sentencing, Lark was also ordered to pay full restitution of $474,907. We note that Lark is a former Northumberland Borough Council member. Lark had been employed by the utility since 1994. Authorities believe that in 2000 or 2001, Lark began her embezzlement scheme which lasted about 9 years until the beginning of 2010.

Read the story here, here, and here.

Former Mississippi Municipal Worker Indicted For $900K Embezzlement Scheme

Ginger Lynn Lashley, 50, of St. Andrews, Mississippi, was indicted yesterday on charges she embezzled $890,827.58 from Jackson County, for whom she had been employed as an accounts payable clerk. Authorities allege that Lashley embezzled funds from the county over an eight year period, beginning in 2001 until she was arrested last November. Prosecutors allege that Lashley created a phony entity, "The Jackson County Food Drive" and set up a bank account into which she deposited checks intended for the county. Instead she used the funds for her own benefit. Lashley was indicted on 8 felony embezzlement counts.

Read the story here and here.

Read the indictment here.

Update (9/22/10): Lashley pleaded not guilty to the charges. Nevertheless, it has been reported that in 1990, she pleaded guilty to 26 counts of embezzlement from another business and was placed on five years’ probation and ordered to pay $7,451.98 in restitution.

Update (4/20/11): Lashley has now pleaded guilty to 8 felony counts of embezzlement.

Update (4/22/11): Lashley was found dead early this morning at the Rankin County Correctional Facility where she was being held. The cause of death has not yet been determined. She had reportedly suffered from diabetes and chronic obstructive pulmonary disease. An autopsy is to be performed.

Update (4/25/11): Lashley's death was ruled a "natural death," from coronary artery disease, according to the Rankin County Coroner, Jimmy Roberts, who described her health as a "walking time bomb" as a result of her various health ailments and conditions, including diabetes and pulmonary disease. Her case has been described as the single largest embezzlement in Mississippi state history.