Thursday, March 31, 2011

Former President of Missouri-based University Charged With Embezzling $1.5 Million

Karen L. Pletz, 63, of Kansas City, Missouri, has been indicted on 24 felony counts alleging she embezzling more than $1.5 million from Kansas City University of Medicine and Biosciences where she had served as President, CEO and Trustee. She was fired in December 2009. According to prosecutors, Pletz caused herself to receive unauthorized additional compensation and engaged in fraudulent reimbursement schemes. Her schemes reportedly spanned at least five years, between 2004 and 2009. Specifically, Pletz has been charged with 16 counts of embezzlement, one count of lying to the IRS, three counts of making false statements on tax returns and four counts of money laundering. She has pleaded not guilty. Meanwhile, the university filed a civil lawsuit against Pletz in March 2010, alleging she spent more than $2.3 million in university funds for her own benefit with little or no benefit to the institution.

Read the story here, here and here.

Vermont Woman Accused Of Embezzling $100K From CitiFinancial

Julie Phillips, 39, of St. Albans, Vermont, has been charged with embezzling an estimated $100,000 from CitiFinancial, Inc., where she had been employed as a district manager. According to authorities, Phillips caused at least 20 fraudulent checks to be issued for what appeared to be legitimate vendors, which she then converted for her own benefit. Phillips' scheme allegedly spanned more than a year, from April 2009 until June 2010. She has plead not guilty to the charges. Phillips faces up to 30 years in prison, plus fines and restitution if convicted on the one count of bank fraud for which she is charged.

We note that Angela Feeley, 35, of Sheldon, Vermont, was also recently charged with and plead guilty to embezzling about $150,000 from CitiFinancial over a five year period. Feely is due to be sentenced this July.

Read the story here, here and here.

Update (10/31/11): Phillips has been sentenced to one year and a day in jail for embezzling what is now believed to be $97,597.  She blamed an addiction to oxycodone pain killer pills for the thefts.

Wednesday, March 30, 2011

Montana Woman Pleads Guilty To $676K Bank Embezzlement

Kathleen "Kathy" Sammons, 52, of Charlo, Montana, pleaded guilty yesterday to charges she embezzled some $676,000 from the Whitefish Credit Union where she had been employed initially as a teller and ultimately branch manager, in their Polson branch. According to authorities, Sammons began stealing cash from her drawer in or about 1998 and continued to do so until June 2010 after a surprise cash audit revealed the missing money. She reportedly confessed to authorities after being confronted. According to reports, Sammons said she used the stolen money to make loan payments for credit union customers, make donations to local charities, pay for high school sports banquets and trips, buy a house in Dillon and cover thefts of cash by other credit union employees and also enhanced her personal income. Sammons employed an elaborate scheme to cover up the thefts, making paper transfers of funds when necessary and doctoring books and records. Sammons went missing immediately after the discrepancy was discovered but was found and arrested two days later.

Read the story here, here and here.

Update (7/7/11): Sammons was sentenced to one month in prison and ordered to pay restitution.  She will also have 5 years probation with 17 months home confinement.

How Do Embezzlers Justify Their Crimes?

Interesting article from WCAX News in Vermont in response to the recent spate of high profile embezzlement cases there: How Do Embezzlers Justify Their Crimes? The article quotes convicted embezzler turned professional responsibility lecturer Tom Hughes, who said that as a trusted employee, "It was easy to take advantage the more trust I had." He goes on to explain that the embezzler usually starts out with a secret "loan" to themselves from company coffers, with the intent to repay it. However, after they are not caught, they realize they can take more money and it becomes habitual. The article goes on to state that "the thieves come to rely on the stolen cash as part of their monthly income. They justify their crime by saying they deserve the money; their employer has enough anyway." Psychologist Tom Powell explains that "embezzlers are usually smart, positive people with nice families who've never gotten in serious trouble before. It's how they fool their bosses. And when they're caught, what shocks their communities." Read the whole article here.

Tuesday, March 29, 2011

Former State Court Clerk In Alabama Pleads Guilty To $108K Embezzlement

Janice J. Adams, believed to be 48 years old, of Adamsville, Alabama, has entered into a plea agreement with federal prosecutors to plead guilty to one count of embezzlement and to make restitution in the amount of $108,277 she embezzled from the Adamsville Court where she had served as Clerk. According to an audit conducted after discrepancies were found, over a period of about 2 1/2 years, from August 2007 to February 2010, Adams kept cash receipts of fines and other fees paid to the court. In her plea agreement, Adams admitted that she used the money "to pay personal expenses and bills and those of her family."

Read the story here.

Update (9/22/11): Adams, now 49, was sentenced to one year and a day in prison. 

Texas Woman Arrested For Embezzling $1.5 Million

Patricia Mancuso Janowski, from Spring, Texas and who just turned 62 years old, was arrested last week and charged with embezzling more than $1.5 million from Cape Software, Inc., where she had been employed as a bookkeeper and secretary. According to authorities, over more than an 8 year period, from May 2002 through September 2010, Janowski electronically transferred company funds into her own accounts by manipulating the payroll and disguising the transfers as "vendor payments." Media outlets have reported that Janowski gambled much of the stolen funds by compulsively playing the video poker games at nearby Klein Food Mart. Last November, Cape Software filed a civil lawsuit against Janowski and her husband, Leo Janowski Jr., 62, in an effort to recover the monies.

Read the story here, here and here.


Read the Montgomery County, Texas Sheriff's Office announcement here.

Former New Mexico Bookkeeper Indicted For Allegedly Embezzling $170K

Rebecca "Becky" Serrano, 46, of Espanola, New Mexico, has been indicted on charges she embezzled nearly $170,000 from Jemez Physical Therapy where she had been employed as a bookkeeper. According to authorities, Serrano siphoned the funds over a period of more than three years, from 2005 through 2008. Specifically, Serrano was indicted on four counts of embezzlement and four counts of tax evasion.

Read the story here and here.

Update (11/7/11): Serrano pleaded guilty to two counts of embezzlement and tax evasion.  She was also orderded to pay full restitution.

Monday, March 28, 2011

Marquet Speaking At IAHSS April 1 On White Collar Crime & Investigations

Christopher T. Marquet, CEO of Marquet International, Ltd., will be speaking at a One Day Educational Seminar sponsored by the Boston Chapter of the International Association for Healthcare Security and Safety ("IAHSS") on April 1, 2011. Marquet's topic will be "White Collar Crimes & Investigations" where he will discuss employee theft and related misconduct at healthcare businesses and appropriate prevention and investigative techniques. This event, dubbed "Investigations: From Deception To Detection" will be held at Faulkner Hospital in Boston. For those interested, a registration form can be found here. Space is limited and time is short.

Former CFO Of California Firm Charged With Embezzling More Than $1.9 Million

Salvatory Josef Fulwider, 36, of Yorba Linda, was arrested and charged last month with embezzling more than $1.9 million from McLarand Vasquez Emsiek & Partners, a local architectural firm where he had been employed as CFO. According to prosecutors, Fulwider transferred some $1.3 million out of one of the firm's partners' accounts and also received over $680,000 in fraudulent reimbursements from the firm. He has been charged with 2 counts of grand theft, 9 counts of forgery and 37 counts of falsifying records. Fulwider's scheme spanned at least 4 years.

Read the story here, here and here.

Read the DA's announcement here.

Hat tip: Reader Connie.

Update (6/5/11): Fulwider, now 38, was sentenced to 13 years in prison.  He was convicted of two felony counts of grand theft, nine counts of forgery, 37 counts of falsifying records

Florida Man Convicted Of Embezzling $13.5 Million From Tree Farm Now Faces State Charges

Gary Ernest Williams, 60, of Tavares, Florida but currently serving a 8 year sentence in federal prison at Fort Dix, New Jersey for embezzling some $13.5 million from Marian Farms, where he had been employed as chief financial officer, is now facing state charges that could get him an additional 30 years. According to prosecutors, Williams forged owner signatures on checks and siphoned monies from company accouts as well as abused credit accounts. Williams reportedly spent much of the embezzled funds on beach property, lavish parties, luxury automobiles and travel.

Read the story here and here.

Hat tip: Reader Connie

Update (7/18/11): Williams was sentenced to another 12 year term by a state court judge.

Saturday, March 26, 2011

Secretary In Louisiana Judiciary System Charged With Embezzling More Than $1 Million

Brenda C. Bickford, 60, of Hammond, Louisiana, has been charged with embezzling more than $1 million from the Tangipahoa Parish's District Attorney's Office of the 21st Judicial Circuit where she has served as a secretary for the past 16 years. According to prosecutors, Bickford created a fictitious company called B&B Court Reporting Services and collected on fraudulent invoices she created for services never rendered. She has been charged with forgery, filing and maintaining false public records, malfeasance and felony theft. The total amount believed to have been stolen thus far is $1,012,700 in a scheme that spanned at least "several" years.

Read the story here, here and here.

Bookkeeper In New Mexico Indicted On Charges He Embezzled $500K; Family Also Arrested

Judd Moore, 45, of Las Cruces, New Mexico, has been indicted on numerous charges stemming from allegations that he embezzled $500,000 from Mesa View Homes, a local contractor and a second unnamed general contractor for whom he had served as bookkeeper. Moore, who was originally arrested last July, was indicted on 60 counts of forgery, conspiracy, embezzlement and tax evasion. The scheme apparently dates back to at least 2007 and the New Mexico Taxation and Revenue Department claims he owes back taxes on the ill-gotten gains from 2008 and 2009. Moore has also been charged with practicing law without a license. His wife, Rose Moore, 45 and two adult children, Leanna Moore, 20, and Jeffrey Moore, 18, were also arrested last July and have been charged with forgery as apparent co-conspirators in Moore's scheme, which also involved credit card fraud. The family reportedly used the misappropriated funds to pay for luxury vacations and personal items.

Read the story here, here and here.

Texas Woman Accused Of Embezzling $437K In Civil Suit

Nency Garcia, believed to be 31 years old, of Aldine, Texas, has been accused in a civil suit filed by her former employer, R & B Group, Inc., of embezzling as much as $437,000 from the company. According to the lawsuit, case no. 2011-18297 and filed in Harris County District Court on March 24, 2011, Garcia was a "trusted employee" who used her position to siphon payroll tax funds for herself rather than paying the IRS. It alleges fraud, conversion, breach of fiduciary duty and violations of the Theft Liability Act. The suit also alleges that Garcia attempted to cover up the thefts by submitting fraudulent IRS 941 forms. Additional details on the case are undisclosed at this time. However, it does not appear that she has been charged criminally.

Read the story here.

Friday, March 25, 2011

Missouri Man Pleads Guilty To $769K Embezzlement

Glenn Wade Muir III, 45, of St. Joseph, Missouri, pleaded guilty yesterday to charges he embezzled $769,006 from two related companies that provide nursing home and in-house care services, for which he had served as CFO: Quality of Life Management Inc. and Saxton's Christian Care and Investments Inc. According to authorities, Muir stole the funds over a five and a half year period, between January 2004 and August 2009, by forging the owners signatures on company checks. On May 28, 2009, Muir reportedly left work after stealing approximately $24,496 from a locked safe in the office, cleaned out his personal items at his home and fled after the misappropriation came to light. However, he was arrested on October 25, 2010 in Las Vegas, Nevada. He has plead guilty to one count of bank fraud. Muir also owes $239,406 to the IRS for taxes plus interest and penalties on the ill-gotten monies.

Read the story here and here.

What Is The Typical Profile Of An Embezzler And How Do You Stop Her?

A question often posed to me is, "What is the typical profile of an embezzler?" Based upon Marquet International statistics compiled over the past three years of major embezzlements involving employee thefts of more than $100,000 in the United States, certain characteristics do stand out.

For example, she would be female, in her mid-40's, working in a bookkeeping capacity at a small business, non-profit organization, government entity or in the healthcare or financial services industries. Let's call her "Evelyn" the embezzler (no offense to all you Evelyns).

Evelyn would probably be a relatively long term employee (more than 5 years) and would generally be viewed as helpful, trustworthy and hard working. Many business owner victims exclaim after the fact how betrayed they feel and that they "trusted her completely and treated her like family."

This fictitious prototypical embezzler Evelyn would engage in more than one type of misappropriation scheme, most likely forging checks, converting company reciepts for her own benefit or making unauthorized electronics funds transfers to herself or accounts she controls. Evelyn would most likely have schemed on her own without involving any co-conspirators. Her thefts would most likely span about 4 1/2 years. Evelyn would attempt to cover up her misdeeds by creating false bookkeeping entries and submitting false financial reports to her superiors.

In cases of employee thefts of more than $100,000, our Evelyn will embezzle on average more than $800,000. She would most likely be located in California, New York or Florida.

Rather than being motivated to steal as a result of severe personal financial difficulties, Evelyn would most likely be driven by greed or a desire to live a more lavish lifestyle than she would otherwise be able to achieve on her regular salary. The stolen monies would often go toward paying personal expenses such as credit card bills, mortgage and car payments, utilities and tuition bills. She would spend it on luxury items, such as jewelry, fine clothing, furniture, automobiles and high-end electronics. As for big ticket items, she would also likely spend the stolen funds on luxury vacations, gambling junkets, real estate or home renovations.

Of course, there are many exceptions to this profile - such as the fact that Evelyn's male counterpart (Ernie the Embezzler) would likely embezzle a significantly greater amount.

Nevertheless, the good news is that eventually Evelyn would most likely get caught - probably by accident, but sometimes as a result of an alert co-worker or new staff. Unfortunately, annual audits typically will not surface such frauds. Evelyn would eventually get prosecuted - the wheels of justice move slowly but methodically - and she would make a plea arrangement and be sentenced to spend about 4 1/2 years in jail - roughly about as long as her scheme lasted.

Evelyn would also be ordered to pay restitution to the victim organization. The bad news is that full recovery is rarely made. Much of the money is spent and non-recoverable and those assets that can be attached will frequently have depreciated in value. Plus there is the added cost of investigating, auditing and correcting problems created by the embezzlement - sometimes large tax bills.

The other bad news is that the actions of the Evelyns of the world often have a devastating effect on many organizations, particularly small businesses and non-profits. The road to recovery can be difficult, time consuming and costly and many companies have had to cut benefits, lay off employees and even file for bankruptcy as a result of such an embezzler.

Below is a list of some of the proactive steps organizations can take to minimize the risk of being victimized by our imaginary Evelyn as described above:

  • Do not allow a single individual access to all aspects of company finances. Make sure there is a division of duties in the finance department.
  • Regularly rotate responsibilities for bookkeeping personnel.
  • Require bookkeeping personnel to take time off and vacations. Embezzlers often take little or no vacations to perpetrate their schemes.
  • Do not allow bookkeepers to take work home.
  • Require two signatories on outgoing checks above a certain nominal amount. The signatories should be different individuals from the check preparer.
  • Examine cancelled checks regularly. One common method of embezzlement involves the forgery of checks. Another is to have them payable to the embezzler or their personal vendors.
  • Maintain unused checks in a lockbox. Be sure all checks, purchase orders and invoices are numbered consecutively and reconcile any of those missing.
  • Conduct regular as well as random audits. Owners should take a hands-on management approach by physically spending time with the bookkeeping department.
  • Audit petty cash regularly.
  • Audit credit card charges regularly.
  • Audit expense reports regularly.
  • Be sure each payment, electronic or otherwise, is backed up with appropriate documentation.
  • Backup financial records daily.
  • Make and reconcile daily deposits. Use a “for deposit only” stamp for check deposits. The person recording cash receipts should be different from the one making the actual deposits.
  • Bank reconciliations should be made by a different person than those that handle cash receipts and cash disbursements.
  • Know who your vendors are. Embezzlers often create phony vendors and submit fraudulent invoices for payment.
  • Examine payroll records regularly. Some embezzlers issue themselves extra paychecks and bonuses through the payroll system.
  • Investigate customer and vendor complaints promptly. If vendors are not being paid as expected, it may be a sign that the payment checks are being diverted.
  • Conduct pre-employment background checks for all personnel with fiduciary duties.
  • Prosecute perpetrators, creating a permanent record future employers can find.

Evelyn may be a business owner’s worst nightmare, but with some prudent attention to your business, much of the risk can be mitigated.

For more information, read our latest Annual Report On Embezzlement.

Thursday, March 24, 2011

Civil Trial To Start Today Accusing Michigan Woman Of Embezzling $750K

Janey B. Golani, 59, of Dearborn Heights, Michigan, faces a civil trial scheduled to commence today, in which she is alleged to have embezzled some $750,000 from International Outdoor, an advertising company where she is believed to have been employed as an office administrator. The lawsuit also named her husband, Atour Y. Golani, 59, as a defendant in the case. No criminal charges have been filed in the case and details are scant due to an apparent gag order. However, she is alleged to have taken customer checks and converted them for her own benefit. The civil suit, styled International Outdoor, Inc. and Transit Advertising Group v. Janey Golani and Atour Golani, Oakland County Circuit Court case no. 2009-104560, was filed on October 12, 2009. It is believed to seek recovery of the allegedly misappropriated funds, among other things. Janey Golani has been a member of the Crestwood Board of Education since her initial election in 2002. She has not resigned her position on the board, according to media accounts. Read the story here.

California Man Accused Of Embezzling $150K From Local Roofing Company

George A.J. Coelho, Jr., 53, of Tracy, California has been accused by authorities of embezzling nearly $150,000 from Pinnacle Roofing Company, where he had been employed as a general manager for nearly a decade. According to reports, Coelho caused the company to pay for his personal credit card charges which included lavish spending on such things as vacations and personal luxury items. According to his attorney, Coelho plans on pleading not guilty. Pinnacle Roofing owners Greta Yerian and Jerry Yerian, discovered the misappropriation after conducting their own audit of the company's finances in light of financial difficulties it and they were facing. Coelho was terminated in 2009, according to reports.

Read the story here.

Update (7/20/11): Coelho pleaded guilty to embezzlement and agreed to pay $50,000 within 90 days as a downpayment for his restitution.  The court may order more restitution as it determines.  Coelho's scheme spanned more than 6 years, from December 2002 and March 2009.

Wednesday, March 23, 2011

Florida Bank Teller Charged With Embezzling $111K

Robert Anthony Hewitt, 44, of Panama City, Florida, has been charged with embezzling $111,000 from Trustmark Bank where he had been employed as a bank teller. According to authorities, over a period of nearly a year, from October 2009 until July 2010, Hewitt took $60,000 from the bank ATM, $50,000 from the bank vault and $1,000 his teller drawer. Hewitt has been charged with first degree larceny.

Read the story here.

Tuesday, March 22, 2011

California Woman Accused Of Embezzling $784K Pleads Guilty To Tax Evasion Charges

Beverly Jean Harville, 50, of Rio Vista, California, pleaded guilty today to five counts of felony tax evasion in connection with allegations she embezzled some $784,000 from an unnamed company for which she had been employed as a bookkeeper and payroll specialist for 21 years. According to authorities, Harville misappropriated the funds over a period of at least 4 years, from 2004 until 2008, in a variety of means, including transferring monies directly out of company accounts, converting employee vacation time into cash and writing checks to herself. In her plea agreement, Harville is expected to be sentenced to 30 months in state prison, plus make full restitution to the company and to the IRS, which claims she owes more than $250,000 in back taxes on the ill-gotten gains. Sentencing is scheduled for June 28, 2011.

Read the story here.

Update (6/30/11): Harville was sentenced to 30 months in prison and ordered to pay restitution.

Former Head of Fire Company in New Jersey Sentenced For Embezzling $500K

Charles V. Mancini III, 46, of Wenonah, New Jersey was sentenced to 52 weeks in prison for embezzling $505,099.79 from the New Sharon Fire Co. and Deptford Fire Department where he had served as President and Treasurer. According to authorities, Mancini diverted insurance proceeds by writing checks to himself and other entities he controlled. Mancini attempted to conceal the misappropriations by providing false bank statements. He was also accused of opening up a $90,000 line of credit in the name of the fire company without authorization and using most of the proceeds for his own personal benefit. Mancini's schemes spanned more than 2 years, from September 20, 2006 until November 21, 2008. Mancini pleaded guilty last September

Read the story here, here and here.

Note: not a good idea to have the same person with both the check writing and reconciliation functions in an organization.

Monday, March 21, 2011

Florida Bookkeeper Accused Of Embezzling $130K

Amy Christine Bennett, 38, of Cape Coral, Florida, has been charged with embezzling more than $130,000 from Turbine Generator Maintenance where she had been employed as a senior staff accountant. According to authorities, Bennett used company credit card accounts to pay for personal expenses through PayPal.

Read the story here and here.

Selecting The Right Business Investigator Is Important — But Using Them Effectively Is Crucial

It doesn’t take a rocket scientist to understand that you wouldn’t ask a carpenter to repair an electric circuit or expect an electrician to rebuild a roof.

The same holds true for asking counsel to conduct in-depth investigations for internal misconduct or litigation purposes. Just as specialists like skilled carpenters and electricians cannot be expected to be experts at repairing anything that’s broken, many counsel, though they have legal skill and experience, should not be counted upon to serve as their clients’ business investigators.

With an unprecedented surge of scandal underscoring today’s less-secure economic climate, and with senior executives and board members now being held more accountable for their companies’ conduct, cursory investigations that once began and ended over a simple review of public records, have become virtually useless. More important, their superficiality has recently resulted in some highly publicized, embarrassing and very costly business blunders, further heightening the value of expert investigative consultants.

Good Investigators can’t replace lawyers, but their intelligence-gathering skills—which provide timely and accurate information in this fast-paced, competitive environment—can significantly strengthen counsel’s ability to reduce risk and make more informed strategic and operating decisions.

Most lawyers seeking professional investigators get referrals from other attorneys. It is important to make sure the investigative firm is locally licensed, holds appropriate insurance and has a reputation for legal and ethical behavior, responsiveness and open communication. Excellent references are essential, and a face-to-face never hurts—in fact, it often serves as a good barometer of how comfortable and collaborative the professional relationship will be.
Still, getting the right expert for the job is just the beginning. The trick is in understanding precisely what investigators can provide counsel and how they can be utilized effectively. It is no accident that many business investigative consulting firms often include former top law enforcement officials recruited from the prosecutorial ranks, the C.I.A., F.B.I., D.E.A. and police departments, as well as forensic accountants, attorneys and former journalists known for their thoroughness and tenacity.

Reputable investigative consulting firms offer counsel versatility. Their staffs are trained to conduct in-depth interviews, gather facts, calculate financial damages and collect cyber evidence – suitable for presentation in court -- digging deep and wide to unearth the underpinnings of business transactions, disputes over intellectual property and financial obligations, and cases entailing fraud and theft or employee misconduct.

To pierce the corporate veil, business investigators reach well beyond a review of easily accessed public records, and are especially adept at identifying, locating and evaluating potential witnesses. In addition to interviewing industry and confidential sources, they conduct intensive background checks, which include complex asset searches and looking for long-buried criminal records, past co-conspirators in fraud cases and evidence of problems such as substance abuse, gambling and personal financial difficulties. They also check out disparities between lifestyle and salaries, which can sometimes bear clues to true corporate structures and entity relationships.

When confronted by lawyers, witnesses may instinctively clam up. But effective investigative consultants know how to prevent that from happening. They often conduct a thorough background search and develop a script with counsel’s approval before contacting the subject. Sensitivity to the impact of cultural differences can also be critical in conducting interviews. Investigators must study the foreign business customs and mores, arming themselves with information that will not offend, but rather put the subject at ease. And, whenever possible, they avoid impersonal telephone interviews, preferring face-to-face meetings to establish more collaborative and cooperative relationships.

Utilizing computer, behavioral and accounting forensics, skilled investigators can provide corporate counsel with litigation intelligence and support by determining defensible valuation of potential damages and serving as specialized valuators for intellectual property disputes. By delving into an adversary’s litigation history and strategy, investigators also supply counsel with invaluable information to assess the strength of the opposition’s case. They can also determine the adversary’s financial ability to sustain litigation, evaluate how important the case is to them and ascertain whether they will be able to satisfy judgments.

What’s more, resourceful investigators, skilled in computer forensics, are experts at gathering and evaluating cyber evidence. By targeting key word searches on imaged hard drives—including slack space—they often recreate key email histories, determining whether evidence has been deleted, hidden or otherwise altered and ensuring that it will be presented properly for admission in court.

In addition to understanding how to utilize investigative consultants, corporate counsel also must understand how to manage relationships with them. Regular and open communication is the foundation of the relationship. To start with, be sure your investigator has no conflicts of interest. Prepare and execute an engagement letter or agreement for each assignment—a measure that will establish the work-product privilege, as well as clarify such deliverables as verbal and written reports. Equally important is a comprehensive discussion of case strategy and operating methodology in advance, clearly setting forth the investigative activities and establishing a budget as well as a timeline. Find out how much reliance they place on subcontractors as these are resources not directly under your control. Determine what quality and ethical assurances are in place with subcontractors.

Last, but certainly far from least, when dealing with investigative consultants, corporate counsel should be wary of the “wink and nod.” Those are best left to magicians, who are experts at pulling rabbits out of hats, not at conducting appropriate and ethical business investigations.

* * *
Christopher T. Marquet is CEO and Founder of Marquet International, a boutique due diligence, investigations and security consulting firm based in Boston, Massachusetts. He can be reached at chris@marquetinternational.com or (617) 733-3304.

Judges Association Former Bookkeeper In Washington State Suspected In $400K Embezzlement

An unnamed female former bookkeeper for the Washington State Superior Court Judges' Association is suspected of embezzling as much as $400,000 from the non-profit group. According to media reports, the bookkeeper was fired last April after an internal investigation revealed the misappropriation. The thefts allegedly spanned "several years." The matter has been turned over to law enforcement officials for further investigation and possible prosecution. Specific details about the case have yet to be released.

Read the story here, here and here.

Update (9/16/11): The unnamed female former bookkeeper accused of embezzling nearly $452,000 from the Washington State Superior Court Judges' Association has been identified as Barbara Jo Ericsson, 56, aka, Barbara Jo Fulton.  She has been sentenced to 24 months in prison.  Ericsson wrote and forged at least 136 checks to herself or her own benefit over the course of seven years, according to authorities.

Former School Administrator In Vermont Expected To Plead Guilty To $106K Embezzlement

According to press reports, Deborah Ann Clough, 44, of Proctor, Vermont is expected to plead guilty to charges she embezzled some $106,000 from Proctor High School where she had been employed as an administrative assistant that included some bookkeeping responsibilities. According to authorities, over a two year period from August 2007 to August 2009, Clough issued numerous checks to herself drawn from the PHS Student Activities account and “fabricated supporting documents to justify the issuance of the checks.” Clough is also accused of filing a false tax return. She was terminated after the discrepancies came to light. Clough faces up to 20 years in prison.

Read the story here and here.

Saturday, March 19, 2011

California Woman Pleads No Contest To $215K Bank Embezzlement

Vanessa Tedeschi Outlaw, 31, of Santa Rosa, California, pleaded no contest to charges admitting she embezzled $215,417 from Exchange Bank, where she had been employed as an administrative assistant. According to authorities, over a period of some 20 months, from August 2008 to April 2010, Outlaw transferred funds out of an internal corporate account at the bank meant for promotions and incentives for employees. As part of her plea agreement, Outlaw was convicted on 10 counts of felony embezzlement and one count of felony grand theft. Her husband, Brian Outlaw filed for divorce after the police arrested her last April.

Read the story here.
Note: How ironic a name is that?

Friday, March 18, 2011

Update: US Marshals Holding Auction On Saturday To Sell Off Jewelry Seized From $34.5 Million Sachdeva Embezzlment Case

The US Marshal Service is holding an auction of jewelry seized as part of the case against Sujata "Sue" Sachdeva, 47, of Mequon, Wisconsin, who plead guilty last July to six counts of wire fraud, admitting she embezzled some $34.5 million from Koss Corp., where she had been employed as Vice President of Finance. Sachdeva was sentenced to 11 years in prison and ordered to make full restitution. Numerous luxury items were seized from her home, office and storage facilities, as part of the forfeiture aspect in this case. For those interested in bidding on the jewelry, the auction is being held at the Wyndham Airport Hotel in Milwaukee, Wisconsin. Public viewing of the items was held earlier today. A $500 deposit is required for bidding. A catalog of items to be auctioned Saturday is available online here. US Marshals hope to raise as much as $1 million with the auction of the jewelry, which represents approximately 10 percent of the inventory seized in this case. The rest will be auctioned in online-only bidding beginning March 24. Sachdeva is currently serving her 11 year sentence at the federal prison in Danbury, Connecticut.

Read the story here.

Read FraudTalk's earlier posts on the Sachdeva case here, here, here, here, here and here.
Update (3/19/11): Jewelry auction netted $1.2 million for Koss restitution.
Update (3/24/11): The US Marshals auction for Sachdeva's luxury clothing seized in this case began today and runs through April 7th. See here for a list of all the items on sale.

New Jersey Woman Sentenced In $370K Embezzlement Case

Jodi B. Muraczewski, 46, of the Waretown section of Ocean Township, New Jersey, was sentenced to 3 years in prison for embezzling some $370,000 from Harrah's Entertainment Inc.'s Project 21 program. According to authorities, Muraczewski, a paralegal supervisor at Harrah's who handled bookkeeping responsibilities for the program - set up to educate people about the dangers of underage gambling - forged checks for her own benefit. Muraczewski allegedly siphoned the funds over a period of at least four years, from 2005 until 2009. She was originally charged last September and plead guilty last December. Muraczewski was a 17 year employee of Harrah's.

Read the story here and here.

Thursday, March 17, 2011

Barry Minkow, White Collar Rogue From The 80s Turned Fraud Analyst, Reportedly Will Plead Guilty To Insider Trading Charges

Media outlets report that Barry Jay Minkow, of Poway, California, who just turned 44 today, is expected to plead guilty to insider trading charges in connection with his trading in shares of Lennar Corp., a large home builder. Minkow is infamously known for his conviction on securities fraud, racketeering and a host of other financial fraud felonies in December 1988 when this apparent boy business phenom (he was 21 at the time) and his company, ZZZZ Best, turned out to nothing more than a Ponzi scheme. He was sentenced to 25 years in prison and ordered to pay $26 million in restitution, but was released in 1995. Since his release, Minkow formed a business called the Fraud Discovery Institute with which he would identify companies that allegedly had fraud issues or that had executives in their management team who had inflated their resumes (see our Resume Liar's Club). Minkow reportedly shorted those stocks he had identified and profited from the drop in stock price upon the announcements of his findings. In the Lannar case, Minkow led an online attack on the company in 1999 accusing it of fraud, based upon a disgruntled client's acusations. This led Lennar to name Minkow as a defendant in a libel and extortion case originally filed against the disgruntled client, Nicholas Marsch. Meanwhile, Minkow allegedly traded in the company's stock based on "non-public" information, which, in turn, has led to the current criminal action. The charge carries a maximum 5 year sentence.

Read the story here, here and here.

Update (1/23/14): Minkow has now pleaded guilty to charges he embezzled more than $3 million from the San Diego Community Bible Church.  According to Fox 5 TV:
Barry Minkow, who is currently in custody after his conviction on unrelated securities fraud charges, admitted his guilt in the embezzlement case in a hearing before Magistrate William Gallo.
 Minkow, who pleaded guilty to conspiracy to commit mail fraud, wire fraud and bank fraud, faces up to five years in prison when he is sentenced April 7.
 “Barry Minkow pled guilty today to embezzling more than $3 million in money intended as church donations (while employed as a pastor) and concealing it all from the IRS,” said Joel P. Garland, Acting Special Agent in Charge of IRS Criminal Investigations for the Los Angeles Field Office.
 “Barry Minkow has admitted not only his fraud, but his omission of over $890,000 in unreported income and over $250,000 in tax,” Garland said.
 Minkow, 46, admitted to a litany of improper conduct that continued for more than a decade, including opening unauthorized bank accounts on behalf of the San Diego church, forging signatures on church checks, using funds drawn on legitimate church accounts for his personal benefit, and charging unauthorized personal expenses on church credit cards.
... 
Read the updated story here.
See Minkow profiled in our White Collar Rogues Gallery.

South Carolina Woman Charged With Embezzling $118K From Municipality

Mandy Lynn Drew, 34, 0f Ridgeland, South Carolina, has been arrested and charged with embezzling some $118,000 from the Town of Ridgeland, where she had been employed as an accounts receivable clerk in the municipality's water department. According to authorities, Drew's thefts began in or April 1, 2009 and continued through January 18, 2011. Full details have not yet been released.

Developing...

Read the story here and here.

New Hampshire Man & Cohorts Indicted For Allegedly Embezzling $1.9 Million From Massachusetts Company; Mob Ties Alleged

Charles Davis, 44, of Salem, New Hampshire, has been indicted on charges he was involved in a conspiracy to embezzle $1,864,353 from Randstad Professionals, a temporary employment agency based in Wakefield, Massachusetts. According to prosecutors, Davis, who was employed as an account manager for Randstad, laundered the stoley money through Charles Toomajian, 53, of Malden, Massachusetts and a local attorney. Toomajian, is also alleged to have embezzled $659,525, to pay off loan sharking and gambling debts to Joseph Giallanella, 62, of North Andover, Massachusetts and Michael Petrillo, 56, of Peabody, Massachusetts. Davis has been charged with conspiracy, larceny, and making false entries into corporate books. Toomajian, who has served as special assistant to Malden Mayor Richard C. Howard, has been charged with conspiracy, larceny, receiving stolen property and being an accessory after the fact of a felony. Giallanella has been charged with conspiracy and accessory after the fact of a felony. Petrillo is due to be arraigned on April 11. The scheme is reportedly part of larger schemes involving reputed Boston area mafiosa capo Mark Rosetti.

Read the story here, here, here and here.

Former State Court Clerk In Nevada Suspected Of Embezzling $202K

Teresa Ann Prince, believed to be 45 years old and also known as Teresa Norris-Longley, of Reno, Nevada, is being investigated for allegedly embezzling $202,008 from Washoe County District Court where she had served as a supervising clerk until her resignation March 2. According to media reports, Prince is suspected of writing as at least 38 checks to her husband, Charles Norris, from the court trust account and depositing them into their joint account. The thefts allegedly began on March 1, 2009 and were discovered only late last month. According to Transparent Nevada, Prince made nearly $100,000 in salary and benefits in 2009.

Read the story here, here and here.

Watch the video here.

Update (4/26/11): Prince, 45, was arrested today on charges she embezzled more than $200,000 from the Washoe County District Court. She allegedly stole the money to pay for gambling debts.

Update (6/11/11): Prince pleaded guilty to embezzling $202,000 from the Washoe County District Court and is due to be sentenced on September 22, 2011.

Update (9/22/11): Prince was sentenced to three one to five year prison sentences to be served concurrently.

Wednesday, March 16, 2011

Former Massachusetts Municipal Library Head Charged With Embezzling $200K

Robert E. Rice Jr., 45, of Rowley, New Hampshire, has been charged with embezzling at least $200,000 from the Revere Public Library, where he had served as its longtime director. According to prosecutors, Rice purchased items for himself with library funds, such as books, DVDs, software and other items. He is alleged to have sold some of the items purchased with municipal funds on Ebay, pocketing the proceeds. Rice was indicted on 21 felony counts, including 3 counts of embezzlement by a city officer and 15 counts of procurement fraud. The misappropriations dates back to at least 2005 and continued until January 2009 when he resigned his position after being confronted with some improper purchases, including a Rolex Watch and elephant tusks. Rice had been employed by the library for 27 years, serving as director for the last 12 years.

Read the story here and here.

Update (12/28/11): Rice, now 46, pleaded guilty in a plea agreement to 18 felony counts including embezzlement by a city officer and procurement fraud and was sentenced to 6 months in prison.  Since leaving his post at the Revere Public Library, Rice took a position as director of the Pelham Library in Pelham, New Hampshire.  Shockingly, Francis Garboski, chairman of the Pelham Library trustees is quoted as saying that Rice's job will be held for him while he is serving his time.

Pennsylvania Woman Charged With Embezzling Nearly $1.4 Million

Marie Garda-Knoche, 37, of Moon Township, Pennsylvania, has been charged with embezzling nearly $1.4 million from two co-located businesses, Allegheny Psychological Services and Allegheny Forensic Associates, for which she had served as business manager. According to authorities, Garda-Knoche wrote checks to herself using a signature stamp, abused company credit cards for personal expenses and gave herself unauthorized pay raises. She is also accused of misappropriating cash receipts. Garda-Knoche reportedly spent the stolen funds on personal travel, to pay off personal credit cards, student loans and other personal bills as well as pay personal expenses for family members and her former boyfriend. Some of the checks she allegedly forged were made out to her now husband.

Read the story here and here.

Note: What is in the water in Moon Township? This is the second major embezzlement case to surface this month. Recall that Shirley A. Howl, 55, also of Moon, was indicted on charges she embezzled some $400,000 from West-Aircomm Federal Credit Union.

Alabama Couple Sentenced For $120K Embezzlement Scheme

Charles Allen Elliott, 38, and Carol Ann Elliott, 43, of Etowah County, Alabama, were each sentenced to 18 months in prison for embezzled some $120,000 from DWP Construction where Charles Elliott worked as an IT consultant and Carol Elliott as a bookkeeper. The Elliotts pleaded guilty last December to charges of forgery and computer fraud in connection with an embezzlement scheme that spanned about 2 1/2 years, from June 2006 to January 2009. During that time, Carol Elliott forged company checks which they used for personal expenses. It was also alleged that Charles Elliott, in his capacity as IT consultant setting up the company network, provided Carol Elliott with user names and passwords for the business owners so she could monitor their activities and determine whether they had become suspicious of her fraudulent activities. The couple was also ordered to pay restitution of $133,000.

Read the story here and here.

Tuesday, March 15, 2011

Michigan Man Accused Of Embezzling Nearly $300K From Church

Jon Michael Ruppel, 46, of St. Joseph, Michigan, has been charged with embezzling nearly $300,000 from Saint Peter's United Church of Christ where he has served as church treasurer. According to authorities, Ruppel's thefts spanned about an 8 year period beginning in or about 2002, by taking cash from the the collection plate as well as fraudulently withdrawing funds from the church's gift account for his own benefit. Ruppel faces up to 20 years in prison if convicted of the charge of embezzlement of more than $100,000.

Read the story here, here and here.

Maine Woman Accused In Civil Suit Of Embezzling $117K From Environmental Group

Patricia M. "Trish" Dano, 43, of Naples, Maine, has been accused in a civil lawsuit of embezzling some $117,000 from the Maine Island Trail Association, a non-profit environmental association where she had served as business manager. According to the lawsuit, Dano used the organization's credit card for personal expenses and forged checks for her own benefit and then created “parallel and inaccurate banking records” to hide the misappropriations. She is also alleged to have caused unauthorized electronic funds transfers to pay her personal credit card bills. The thefts allegedly spanned a 4 1/2 year period, from August 2006 until early February 2011, when her position was eliminated and suspicious transactions were discovered. Research suggests that Dano has also served as the business manager for the Maine Democratic Party.

Read the story here and here.

I strongly suggest that the folks at the Maine Democratic Party check their books and records carefully.

Update (5/24/11): Dano has reached a civil settlement with the Maine Island Trail Association (MITA) whereby a restitution agreement has been made.

Saturday, March 12, 2011

Florida Woman Sentenced For Embezzling $115K From Medical Offices

Laurene Jones, 37, of Hudson, Florida, was sentenced to 4 years in prison followed by 10 years probation for embezzling some $115,500 from two doctors offices, that of Dr. Anthony Sankoorikal and Florida Sports Medicine, where she had been employed as a bookkeeper and receptionist. According to authorities, Jones redirected insurance reimbursement checks to her personal bank account over a period of more than three years, from May 2006 until September 2009. Jones was arrested last July after one some petty cash and checks were discovered missing. Police investigators said Jones forged doctors signatures or used a signature stamp to endorse checks to herself. Jones plead guilty to two counts of scheme to defraud on March 1, 2011. Jones reportedly claimed she was "addicted to money."

Read the story here and here.

California Man Accused Of Embezzling $162K From Non-Profit

Thomas Ray Martin, 47, of Concord, California, has been charged with embezzling some $162,000 from the Discovery Counseling Center of the San Ramon Valley, a Bay Area non-profit mental health organization where he had served as director. According to authorities, Martin used a debit card linked to the checking account of the organization to pay for personal expenses and luxury items. His misappropriations allegedly spanned more than three years, from July 2007 until September 2010. The thefts were quantified after an audit was conducted following allegations of Martin's misconduct and he was terminated last October. Martin has been charged with 4 felony counts of grand theft by embezzlement and has pleaded not guilty.

Read the story here, here and here.

Hat tip: Reader Cheryl

Update (9/19/11): Martin has now reportedly paid some $100,000 of the restitution he owes the Discovery Counseling Center of the San Ramon Valley. 

Thursday, March 10, 2011

Avoiding the Pitfalls of the Foreign Corrupt Practices Act

The past several years have seen a dramatic increase in the enforcement of the US Foreign Corrupt Practices Act [as amended, 15 U.S.C. §§ 78dd-1, et seq.], commonly referred to as the “FCPA”. Originally enacted in 1977 and amended in 1998, the FCPA specifically outlaws payments to foreign government officials “to assist in obtaining or retaining business.” The anti-bribery provision applies to all US citizens, residents and companies as well as to foreign individuals and entities if they are involved, directly or indirectly through third party agents, “in furtherance of such a corrupt payment to take place within the territory of the United States.”

Assistant US Attorney General Lanny Breuer, who has overseen FCPA enforcement actions and prosecutions for the US Department of Justice (“DOJ”), is quoted in a recent speech as saying, “I’m proud to say that our FCPA enforcement is stronger than it’s ever been – and getting stronger. To give you just one metric, in the past year, we’ve imposed the most criminal penalties in FCPA-related cases in any single 12-month period – ever. Well over $1 billion.” According to Breuer, in 2004, the US government levied about $11 million in fines and prosecuted only two individuals under the FCPA. Whereas in 2010, nearly $2 billion in fines were levied and some 50 individuals and entities were prosecuted. Indeed, 8 of the top 10 FCPA settlements ever occurred in 2010, with total fines of over $1.6 billion. The exceptions being Siemens in 2008 for $800 million and KBR/Halliburton in 2009 for $579 million.

Consider the following FCPA enforcement case settlements in just the past few months:

  • On February 10, 2011, Arkansas-based Tyson Foods, Inc. (“Tyson”) agreed to settle alleged criminal violations of the FCPA with the DOJ and the US Securities & Exchange Commission (“SEC”) agreeing to pay fines and penalties totaling $5.2 million. Prosecutors alleged that through Tyson’s Mexican subsidiary, it paid some $100,000 in bribes to two government meat processing plant inspectors using “false books and sham jobs” to help obtain contracts. To settle the charges, Tyson agreed to pay a $4 million fine in the DOJ case and in a separate, related matter brought by the SEC, agreed to pay about $1.2 million in a consent decree.
  • On January 31, 2011, San Diego, California-based Maxwell Technologies, Inc. (“Maxwell”) agreed to settle alleged criminal violations of the FCPA with the DOJ and the SEC, agreeing to pay fines and penalties totaling some $14.35 million. prosecutors alleged that from 2002 through 2009, through Maxwell’s Swiss subsidiary, it paid an agent in China more than $2.5 million to secure contracts in that country. Maxwell’s Chinese agent, in turn, paid bribes to various Chinese government officials, according to the DOJ complaint. Maxwell agreed to a deferred prosecution with the DOJ paying an $8 million criminal penalty and a fine of some $6.35 million in the SEC case.
  • On December 10, 2010, San Jose, California-based RAE Systems, Inc. (“RAE”) settled alleged criminal violations of the FCPA with the DOJ and the SEC, agreeing to pay some $2.9 million in fines and penalties. Prosecutors alleged that from 2004 through 2008, RAE, directly and through two of its joint venture entities, made $400,000 in “improper payments” to Chinese government officials to secure contracts, among other alleged violations of the anti-bribery, books & records, and internal controls provisions of the FCPA. Maxwell settled the DOJ case with a non-prosecution agreement, paying a $1.7 million penalty and a total of about $1.2 million in disgorgement and interest in the SEC case.

Given the emphasis on FCPA enforcement in recent years, organizations operating internationally, especially in high risk countries, should enact plans to mitigate the risk. Organizations can protect themselves from the pitfalls of FCPA violations (and some other potentially serious legal issues), by taking some practical steps, including, but not limited to the following:

  • Develop and widely publish a corporate code of conduct including policy regarding the FCPA – regular reminders and training for employees is critical. Be sure local employees in overseas offices have the policy in their own language.
  • Assess your risk – are you operating in high risk countries, known for corrupt business practices? Check Transparency International’s annual corruption perception index.
  • Create a compliance function – with specific FCPA authority. The compliance officer
    should be charged with training and awareness as well as providing a check and
    balance.
  • Set up a compliance/ethics hotline – again publish this number widely and make sure employees have an affirmative duty to report suspected wrongdoing (which should be included in the code of conduct). Allow for anonymous tips.
  • Audit overseas branch offices/operations regularly and irregularly – make sure compliance/ audit is comfortable with all disbursements of funds.
  • Conduct rigorous due diligence vetting of all third party agents and consultants working on your behalf overseas. In our experience, many of these so-called “five percenters,” charged with helping the company develop a particular overseas market, operate with a different ethical standard and can often get a company into FCPA trouble.
  • Know your customer – conduct rigorous due diligence on your clients to make sure they are reputable and do not have a history of corrupt business practices.
  • Be sure consultant/agent contracts clearly state your company policy and expectation that violations of the FCPA are strictly prohibited. Make sure they sign onto the company’s code of conduct. The reality is that even though an agent may not be a direct employee, if they are operating on your behalf, you will bear the liability of any corrupt business practices, such as bribery or kickbacks.
  • To the extent practicable, maintain branch office finances and financial operations
    from the headquarters offices rather than the field. Do not allow large cash transactions.
  • When acquiring overseas companies or operations, conduct rigorous due diligence vetting of all key personnel and agents, audit contracts and business relationships and make sure they have a history of ethical business practices.

Below are some of the “red flag” warning signs and risk factors for FCPA issues:

  • Conducting business in countries with high corruption risk factors;
  • Cash or other unusual means of payment;
  • Payments to family members of government officials;
  • Engagements with third party agents with little or no apparent qualifications;
  • Payments to shell companies;
  • Unusual or excessive commissions or “success fees” paid to third parties;
  • Donations to special charities, institutions or agencies on behalf of government officials;
  • Unusual processing or transactional fees;
  • Excessive entertainment, travel or gifts;
  • Lax or improper record keeping;
  • Foreign clients or third party agents who have had a history of improper business practices;
  • Insistence that a particular third party agent be used; and,
  • Incomplete responses and/or objections to FCPA/compliance certification.

If you find your company the subject of an FCPA enforcement action, some immediate steps should be taken:

Engage reputable counsel with FCPA experience – local counsel may also be necessary;

  • Do not destroy any books and records – in fact, preserve records and other evidence;
  • Cooperate with the government – consider self reporting potential issues;
  • Document any interviews conducted; and,
  • Follow counsel’s advice.


In short, due to the significant negative impact on businesses which are subject to FCPA enforcement actions, it makes sense that some prudent action be taken to prevent an occurrence.

* * *


FCPA Resources:

U.S. Department of Justice’s Lay Persons Guide to FCPA Anti-Bribery Provisions
U.S. Department of Justice’s FCPA Opinion Procedure
Assoc. Corp. Counsel’s FCPA Checklist
Helpful blogs: FCPA Enforcement
FCPA Blog
White Collar Crime Prof Blog


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

Wednesday, March 9, 2011

Pennsylvania Woman and Cohort Plead Guilty & Sentenced In $151K Embezzlement Scheme

Heather McNally, 38, of Norwood, Pennsylvania, pleaded guilty to charges she embezzled $151,201 from Caleco Inc., a real estate agency where she was in charge of distributing commission checks. Meanwhile, McNally's ex-boyfriend, Theodore C. Delikat, 31, of Brookhaven, Pennsylvania, pleaded guilty to similar charges for his role in the scheme. According to authorities, McNally wrote checks from company coffers which Delikat cashed and the two split the proceeds. McNally was sentenced to to 11½ to 23 months in prison and Delikat was sentenced to 10 to 23 months in prison. The scheme reportedly spanned a period of more than two years, from 2007 until early 2010. Some of the checks McNally wrote out to her friend, Gina Renee Birzes, 36, of Media, Pennsylvania. Birzes (pictured here) was also charged in the case. She was arrested in Florida and appears to have some other criminal issues in that state.

Read the story here and here.

Tuesday, March 8, 2011

Michigan Business Owners Report $103K Embezzlement To Authorities

The owners of an unnamed Burton, Michigan-based construction company have reported to authorities that a former employee of the company, an unnamed famale, 45 years old, of Davidson, Michigan, is suspected of writing checks to herself and using the company credit card for to make puchases or payments for her own benefit. The scheme is believed to have spanned a number of years and the total amount misappropriate is at least $103,000. The case has been referred for investigation and possible prosecution.

Developing...

Read the story here.

Bookkeeper Pleads Guilty To Embezzling $400K From Missouri-Based Construction Company

Tammie Lynn Cowell, 37, of Overland Park, Kansas, pleaded guilty today to bank fraud charges admitting she embezzled nearly $400,000 from Obermiller Construction of Harrisonville, Missouri, where she had been employed as an accounting manager. According to authorities, Cowell forged company checks and made improper debit card charges for her own benefit over a period of five years, from 2004 until 2009. She was also accused of failing to deduct health insurance premiums from payroll checks and failing to pay taxes owed by the company - monies she diverted for her own benefit. Cowell faces up to 30 years in prison.

Read the story here.

Read the DOJ announcement here.

Monday, March 7, 2011

Massachusetts Woman Convicted and/or Charged With Embezzling $250K Since 2005

According to the Lowell Sun, Irene M. Nutter, 47, of Tyngsboro, Massachusetts, has been convicted of or charged with embezzling some $266,000 from three different employers since 2005. Nutter has been charged with embezzling $34,000 from Reactive Innovations LLC, a local company where she had been employed. Nutter allegedly forged 15 checks and also took out two credit cards jointly in her name and the company, with which she made 80 purchases for her own benefit. Nutter reportedly spent the funds on cruises, gambling junkets and other luxury items. Also, according to the Lowell Sun article, Nutter was sentenced in December 2007 to one year in prison after pleading guilty to embezzling more than $226,000 in 2005 from Sedgwick Claims Management Services Inc., in New Hampshire and one of its clients, Shaw's Supermarkets. Further, Nutter was also accused of embezzling $6,000 from Parrot Digigraphic, in Billerica, Massachusetts where she was employed briefly while awaiting sentencing in the Sedgwick case. She plead guilty to this last case in August 2009 and was ordered to pay restitution.

Read the story here (which also makes reference to the 2010 Marquet Report on Embezzlement).

Judge Rules Maryland Man Who Embezzled Nearly $700K Must Serve Full One Year Sentence

James Edward Brady Sr., 52, of Elkton, Maryland, who was sentenced to one year in prison last November for embezzling some $696,000 from his father's custom sheet metal manufacturing firm, William H. Brady Inc. and subsidiary, Brady & Brady, was denied his motion to reduce his one year prison sentence. According to authorities, Brady stole the money over a period of about 7 years, from 2003 through 2009, while he was president of the two companies. Brady's scheme involved about 40 transactions whereby he would photocopy blank company checks, cashed the originals and then fabricated legitimate business payments in corresponding sums on the copies. Brady pleaded guilty last August to one count of theft scheme of $500 or greater. Meanwhile, Brady was perceived to be a pillar of the community - he had been appointed to a seven-member advisory board to review the county's ethics code and offer suggestions to the Cecil County Ethics Commission. Brady had also volunteered with the Boy Scouts and had served with the Cecil County Chamber of Commerce's board of directors from 1998 through 2004, including one term as president.

Read the story here and here.

Sunday, March 6, 2011

Texas Bank Sues Bond Holder After $787K Embezzlement

Lubbock, Texas-based City Bank has filed a civil lawsuit against its bond holder, BancInsure Inc. of Oklahoma for breach of contract to recover monies lost from the embezzlement of $787,378.08 by one of its former employees. According to reports, Mary Francis Dunn pleaded guilty last month to charges she embezzled the funds over a period of about 7 years, first while she was with PlainsCapital for five years and then transferring the losses to City Bank in a line of credit, where she continued the embezzle for another two years. Dunn faces up to 30 years in prison for her guilty plea to the charge of Misapplication of Bank Funds By a Bank Employee. Dunn was originally indicted last November.

Read the story here and here.

Update (5/21/11): Dunn, 66, was sentenced to 51 months in prison and ordered to pay more than in $800,000 restitution.

Saturday, March 5, 2011

North Carolina Man Ordered To Pay Restitution Of $154K In Civil Case Alleging Embezzlement

Charles E. Matthews III, 62, of Wilkesboro, North Carolina, was ordered to pay back double the $153,930 he is charged with embezzled from Wilkes Senior Center and Respite Care of Wilkes County Inc. where he had served as executive director. According to authorities, Matthews siphoned the funds over a period of more than 4 1/2 years, between February 2006 and early October 2010, by creating fraudulent invoices and writing checks to himself. He is also believed to have kept some $8,000 in cash donations to the non-profit.

Read the story here.

New Jersey Man Pleads Guilty To Embezzling $458K From US Rep. LoBiondo's Campaign

Andrew J. McCrosson Jr., 59, of Egg Harbor Township, New Jersey, pleaded guilty yesterday to charges he embezzled some $458,000 from campaign coffers of US Representative Frank LoBiondo (R-Ventnor), for which he had served as treasurer. With his guilty plea to a two-count criminal Information charging him with one count of wire fraud and one count of embezzling and converting funds contributed to a federal candidate, McCrosson admitted that over a 15 year period, from 1995 to August 2010, he wrote numerous checks to himself totaling some $458,000 from the LoBiondo for Congress accounts without authorization. McCrosson is scheduled to be sentenced on June 16, 2011. He faces up to 25 years in prison on the two counts as well as fines and restitution. We note that McCrosson previously served for six terms as mayor of Upper Township, New Jersey.

Read the story here, here and here.

Update (9/8/11): McCrosson has been sentenced to 30 months in prison.  He was also ordered to perform 100 hours of community service and make restitution to the Lobiondo campaign.

Friday, March 4, 2011

Montana Woman Charged With Embezzling More Than $300K From University

Christine Rose Bitterman, 49, of Sheridan, Montana, has been charged with embezzling at least $304,000 from the University of Montana, where she had been employed in the University's Montana Residence Life department. According to authorities, Bitterman pocketed cash payments made by students for rent rather than depositing them into University coffers. The thefts occurred over a period of about 7 years from 2003 through July 2010, according to prosecutors. Bitterman has been charged on 5 felony counts of embezzlement.

Read the story here, here and here.

Update (10/14/11): Bitterman was sentenced to 5 years in prison and order to pay restitution of $334,958, plus a 10 percent administrative fee. 

DC Accountant Pleads Guilty To $210K Embezzlement

Carolyn Mitchell, 47, of Washington, DC, pleaded guilty to charges she embezzled $210,800.42 from the National Consumers League where she had been employed as an accountant and an administrative assistant. According to authorities, over a period of more than 5 years, from March 2005 to May 2010, Mitchell misappropriated funds from the private non-profit by depositing checks meant for vendors into her own accounts. She also deposited donor checks into her own accounts. Mitchell, who plead guilty to forging securities, is scheduled to be sentenced on June 24, 2011.

Read the story here, here and here.

Thursday, March 3, 2011

New York Woman Sentenced For Embezzling $350K From Medical Practice

Kathleen L. Heller, 54, formerly of West Seneca, New York, was sentenced to one to three years in prison for embezzling more than $350,000 from Western New York Pediatrics where she had served as chief financial officer. According to authorities, Heller misappropriated a total of $355,262 from the practice by manipulating payroll accounts and making unauthorized credit card charges for her own benefit. She is also alleged to have misappropriated $33,524 from the New York State Tax Department. According to reports, Heller fled in 2005 after suspicions arose and was captured as a fugitive in Florida in June 2009. Heller blamed her actions on an addiction to pain killers. At her sentencing, Heller is appologized and is quoted as saying that she was "very, very sorry with my whole heart and soul" for her actions.

Read the story here, here and here.

Kansas Man Indicted For Allegedly Embezzling $285K From Missouri-Based Masonic Group

Kirk McDaniel Jr., 74, of Prairie Village, Kansas, has been indicted on charges he embezzled nearly $285,000 from the York Rite Masonic Bodies in Kansas City, Missouri, where he had served as Secretary and Treasurer. According to prosecutors, McDaniel made funds transfers from Masonic accounts to several accounts he controlled over a period of as long as five years from June 2000 and September 2005. McDaniel has been indicted on 18 felony counts, including 16 counts of bank fraud and 2 counts of money laundering. McDaniel has paid back $105,012 of the $284,675 he allegedly stole, according to authorities.

Read the story here, here and here.

Read the DOJ announcement here.

Wednesday, March 2, 2011

California Woman Arrested On Charges Alleging She Embezzled $260K

Jaquetta Nicole Coleman, 41, of Glendale, California, has been arrested and charged with embezzling some $260,000 from Renegade 83, a TV production company where she had been employed as a bookkeeper. According to authorities, Coleman had been employed by Renegade 83 since March 2009, but the details and methods of alleged embezzlement has not been released. Glendale Police raided Coleman's home and seized various items, including a flat-screen TV, a Blu-ray player, three computers, shoes and clothing. She is believed to have paid for personal items and expenses with company credit cards.

Read the story here.

Iowa Woman Charged With Embezzling Nearly $175K From Dental Practice

Michelle Lynne Allen, 38, of Marshalltown, Iowa, has been charged with embezzling $173,552 from the Plaza Family Dental Practice where she had been employed as office manager. Specifically, Allen has been charged with one count of ongoing criminal conduct, two counts of first degree theft, three counts of forgery and one count of identity theft. According to authorities, Allen wrote Practice checks and transferred funds to herself or her benefit, among other methods of embezzlement, over a period of about 4 years, from 2006 until 2010.

Read the story here and here.

Pennsylvania Woman Indicted For Allegedly Embezzling $400K From Credit Union

Shirley A. Howl, 55, of Moon Township, Pennsylvania, has been indicted by a federal grand jury on charges she embezzled some $400,000 from West-Aircomm Federal Credit Union where she had been employed as head teller. Specifically, Howl has been indicted on 16 felony counts, including bank embezzlement and false entry in financial institution records. According to prosecutors, Howl's scheme spanned more than 2 years, from August 7, 2007, through November 9, 2009.

Read the story here, here and here.

Update (10/20/11): Howl, now 56, has pleaded guilty to one count of making a false entry in financial institution records in connection with her alleged embezzlement of some $400,000 from the West-Aircomm Federal Credit Union.  She is scheduled to be sentenced on February 16, 2012.

Update (2/18/12): Howl, now of New Brighton, Pennsylvania, has been sentenced to 27 months in prison and ordered to pay full restitution to the West-Aircomm Federal Credit Union. 

Tuesday, March 1, 2011

Pennsylvania Woman Sentenced For Embezzling $195K From Legal Services Agency

Cheri A. Logue, 42, of Claysville, Pennsylvania, was sentenced to 22 months in prison for embezzling some $195,000 from the Southwestern Pennsylvania Legal Services Corporation where she had served as legal aid. According to authorities, Logue misappropriated the funds from the non-profit agency that provides legal services to low-income people, over a period of at least 7 years, from 2001 until June 2008. According to prosecutors, she misappropriated the funds by writing at least 86 checks to herself or for her own benefit, made at least 56 unauthorized cash withdrawals using an agency ATM card, made at least 25 unauthorized electronic transfers to herself or to pay for personal expenses and made more than 300 unauthorized and improper charges to an agency credit card for her own benefit. Many of Logue's ATM withdrawals were made at or near local gambling concerns, suggesting she may have a gambling problem. Logue and her family have already reportedly made full restitution to the agency. Logue, who was fired in June 2008 after suspicions were raised about missing funds, pleaded guilty to the charge of theft from a program receiving federal funds on April 27, 2010.

Read the story here and here.

Read the DOJ announcement here.

Virginia Woman Pleads Guilty To Embezzling Nearly $2.3 Million From Seafood Concern

Leslie M. Coffman, 60, of Norfolk, Virginia, pleaded guilty today to charges admitting she embezzled nearly $2.3 million from Ballard Fish & Oyster Co., Inc. where she had been employed as an administrator and bookkeeper for some 20 years. According to authorities, Coffman wrote checks to pay personal expenses and then attempted to cover up the thefts by creating false entries in the company's books. Coffman pleaded guilty to mail fraud and faces up to 20 years in prison upon sentencing, which is scheduled for this June. The thefts spanned a five year period between 2005 and 2010 and totaled $2,293,696, according to prosecutors. The Virginian-Pilot quoted company president, Chad Ballard as saying, "She was a very trusted employee...She was what I would call one of our major employees. She was the head bookkeeper. She had a lot of leeway."

Read the story here, here and here.