Wednesday, April 10, 2013

Oklahoma Woman Pleads Guilty To Embezzling $175K From Energy Services Company

Cushing Woman Admits HOTCO Embezzlement

Former employee pleads guilty

(Stillwater, Okla.) -- A former employee of Hough Oilfield Services, also known as HOTCO, accused of stealing about $175,000 from the Cushing-based company, pleaded guilty Friday to two counts of embezzlement and one count of second-degree forgery.
Linda Sue Newton, 63, of rural Cushing, does not have a plea bargain regarding her sentence that is scheduled to be imposed on June 7 by Associate District Judge Stephen Kistler, who ordered a pre-sentencing investigation Friday.

Her defense attorney, Brian Jones of Oklahoma City, told the judge in court Friday, "Mrs. Newton has placed $100,000 in an escrow account in the civil case -- we're prepared to pay the balance of restitution today."

Oklahoma State Bureau of Investigation Agent Jon Loffi wrote in an affidavit that Newton was employed by HOTCO for approximately 20 years, had access to company records and authority to issue financial instruments on behalf of HOTCO.

"During her employment from May of 2008 through November 2010, Newton was found to have issued HOTCO company checks on a routine basis to pay her personal Discover card account.

"Duplicate checks for the same amount made payable to legitimate businesses were also written, but never cashed or sent to the intended businesses.

"These checks were apparently entered into the computer system to cover the checks that were issued and sent to her account.

"Oklahoma multicounty grand jury subpoena issued to Newton's Discover card disclosed beginning on or about May 2008, she had written HOTCO checks to pay her personal account.

"Oklahoma multicounty grand jury subpoena was issued to Sam's Discover card account also held by Newton. Documents received as a result of this subpoena disclosed Newton had paid her balance with company funds."

"The total amount of embezzled funds from HOTCO was approximately $175,787.05 during this two-year period," according to the OSBI agent's affidavit.

HOTCO President David Hough wrote in a victim impact statement filed in court records that he hired Newton in 1991 after "I had recently relocated to Cushing."

Describing HOTCO as a small company, Hough said, "There were Linda, myself and one or two other employees. At the time, things were very tough financially because of the nature of the business.
"There were times we could not even pay all the bills every month. We went through hard times together. She knew it was difficult and how hard I had to work, not to mention the emotional stress that I was under for years getting this company established.

"Eventually things started to improve. I made a name for my business and people knew when using HOTCO, they were getting good, honest hard-working people.

"It seems to me that when HOTCO started to become a successful business is when Linda decided to start stealing.

"She had worked hard through the years, but she was definitely paid accordingly. It hurts so much because she was there during the hard times and saw the stress and worry I went through then.

"I thought Linda had been such a loyal employee that when asking her to retire, I paid her a year severance and was going to pay her insurance for the remainder of her life.

"She is in bad health and needed insurance. I had a great appreciation of her loyal service for twenty years and was happy to do this for her.

"I have a bad habit of trusting people. I've also always assumed everyone will treat me as I treat them. This has changed all of that. It has changed the way I do business and jaded my opinion of people forever.

"As far as punishment, I think she should have to pay everything back plus interest and the time and money spent by HOTCO researching our financials for this case.

"I think jail time should be served. She not only stole from me, but my wife and my two daughters, and all her fellow employees.

"No apology from Linda. I don't even know if she thinks she has done anything wrong," Hough concluded in his victim impact statement filed in court records last summer.

Another former employee of HOTCO, Kara Jean Sanders, 34, of Cushing, who was charged with embezzlement and forgery at the same time as Newton last April, was ordered in January to pay $37,909 restitution at the rate of $620 per month.

After Sanders pleaded guilty to embezzlement and forgery in November, she served 14 days in the Payne County Jail and was ordered to pay the cost of her incarceration as a condition of a seven-year probationary sentence, court records show.

Sanders was also ordered by District Judge Phillip Corley to complete a Life Skills course and have a vocational assessment. She also was required to have a mental health evaluation and follow any recommendations, as well as any treatment listed in a background report for the court.

In Sanders' case, the OSBI agent wrote, "She had been employed for approximately five years, and in her capacity she had authority to issue financial instruments on behalf of HOTCO. She was issued a HOTCO company American Express credit card to be used for business expenses.

"During her employment from August 2009 through August 2011, Sanders was found to have used the company American Express card for personal gain.

"Sanders also deposited into her personal checking account legitimate checks from customers of HOTCO and made payable to HOTCO by scrubbing through the HOTCO name in the payable field and overwriting her name.

"Oklahoma multicounty grand jury subpoena issued to Sanders' personal banking account indicated a record of these deposits. These forged checks ultimately were returned to the company of issuance and they clearly indicated Sanders had written her name in the payable field.

"The discrepancy was first noticed by banking clerks who alerted HOTCO to the suspicious instrument.

"During her employment from January 2010 through August 2011, American Express monthly statements disclosed numerous charges to this card by Sanders, which were not HOTCO company business expenses.

"These charges were examined by HOTCO management and determined to be for Sanders' personal gain. These charges continued almost on a daily basis for this time period.

"After this was discovered, Sanders sent a text message over her cellular telephone to HOTCO's chief financial officer admitting she had made a mistake and was sorry for her crime," the affidavit said.
During an interview with the OSBI agent, "Sanders admitted to scrubbing the financial instruments in question and depositing them into her personal banking account and using the HOTCO American Express card for personal gain.

"The total amount of forged documents and unauthorized charges by Sanders from the HOTCO company was approximately $37,909.06," the affidavit said.

In a victim impact statement, David and Denice Hough wrote, "Kara Sanders' theft from our company has affected us and in fact our whole company and family a great deal.

"In fact, my youngest daughter was almost inconsolable when I found myself with no alternative but to try to explain what had happened and why we could not allow Kara to work for us anymore.
"This was a very hard thing for a 12-year-old to understand. She was very close to Kara and so was I or so we thought. My daughter helped Kara coach a tee ball team which HOTCO sponsored.
"Kara, at the time she was fired, was receiving $22 per hour, 100% paid insurance and never disciplined when missing work (which was quite often.)

"We have never felt this kind of disappointment and betrayal. We don't think we can put into words how something like this affects your life and your relationship with others unless you have actually been through this yourself.

"She has two small children to support and she threw everything away without giving them a thought.
"We don't think it is justice for the criminal to only be ordered to pay restitution. There have been accounting fees researching the bookkeeping that should be reimbursed and even interest.

"We would also like to say there has been no attempt at any sort of apology," the Houghs concluded in their victim impact statement.

From 1600kush

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