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.

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.

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.

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.

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.

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.

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.