Candy Wholesaler Sues Casino For "Enticing" & "Enabling" Company Controller To Embezzle $4 Million and Gamble It Away

From Courthouse News Service:

Friday, April 12, 2013

Employer Blames Casino for $4 Million Embezzlement

By CAMERON LANGFORD

(CN) - A candy wholesaler sued an Ameristar casino for $4 million, claiming it "enticed and enabled" a worker who embezzled the money and blew it on slot machines.

     Colombo Candy & Tobacco Wholesale Co. dba Colombo Distribution sued Ameristar Casino Council Bluffs in Douglas County Court, Tulsa.

     It claims its employee, Jane Doe, blew more than $3 million of the $4 million she embezzled at the Ameristar casino in Council Bluffs, Iowa.

     Colombo claims Doe worked as its controller from July 2010 to July 2012. Doe, who is not a party to the case, was in charge of all company finances until it discovered her massive theft and fired her, Colombo says in the complaint.

     "Doe accomplished her embezzlement by taking advantage of her position
as controller to, among other things, inflate inventory and accounts receivable, and manipulate payroll," the complaint states. "Doe used Automated Clearing House ('ACH') transactions to deposit the embezzled funds into Doe's own accounts, against which she then cashed checks at Ameristar, made cash withdrawals at Ameristar and otherwise transferred the money to Ameristar.

     "Doe has entered into a settlement agreement that admits to the embezzlement from plaintiff, and admits to liability to plaintiff. Doe has signed a Stipulation for Judgment and a Judgment by Confession granting plaintiff a judgment against Doe in the amount of four million ninety-nine thousand four-hundred one and 55/100 dollars ($4,099,401.55). Doe cannot repay the amount embezzled or stolen from plaintiff.

     "Doe's annual salary from plaintiff was only approximately $62,000 per year. Yet in 2011 alone, Doe lost in excess of $1,750,000 to Ameristar.
"Ameristar knew the money Doe was using to gamble was embezzled or stolen or had information that would lead a reasonable person to believe the money Doe was using to gamble was embezzled or stolen."

     Colombo Candy claims the casino regularly cashed $10,000 checks for Doe.

     "For example, within the two-week period between February 22, 2011 and March 7, 2011, Ameristar cashed 16 checks for $10,000 each, for a total of $160,000. Over the Labor Day weekend of 2011, Ameristar cashed checks totaling $100,000 for Doe," the complaint states.

     "Ameristar patrons specifically asked Ameristar cashiers what the source of Doe's funding was.

     "Ameristar deliberately closed its eyes to the source of Doe's funding that Doe transferred to Ameristar in order to gamble, in order to avoid meaningful exposure to information that would have provided Ameristar with knowledge of Doe's embezzlement of Plaintiff's money."

     Impressed by Doe's big spending, Colombo says, the casino treated her like a VIP.

     "Ameristar gave special privileges to Doe, including permitting her to go behind the cashier's 'cage' where patrons generally are not permitted in order to obtain cash. Doe would routinely obtain cash in $10,000 increments several times a night.

     "Ameristar deliberately acquired video-slot machines to induce protracted high-risk gambling for Doe, modifying particular video-slot machines specifically for Doe on at least three occasions to increase the amount of money Doe could spend on a single 'spin' or game. Ameristar, on at least one occasion, upon getting a new or modified machine, called Doe and held the machine 'off limits' to other patrons until Doe could be the first to play it.

     "Ameristar's video-slot machines are designed to create and enhance an illusion of control over the outcome of the 'spin' or 'game played,' and Ameristar actively encouraged that belief by pointing out to Doe which machines had recently paid out a 'jackpot.'

     "Ameristar knew which video-slot machines were set to pay out at specific return rates and on multiple occasions Ameristar staff tipped off, or otherwise advised and steered Doe toward specific video-slot machines to play or avoid.

     "Ameristar staff would, when Doe was losing money at a particular machine, direct her to another machine where she usually had a prompt 'win.' Ameristar staff would give machines Doe was using a 'rub' for luck.

     "Ameristar staff would watch Doe gamble, including the cashiers who would leave the 'cage' to watch. Ameristar used multiple versions of the same 'game' with different 'pay-back' percentages, concealed from Doe and distorting her understanding of how the machines work.

     "Ameristar employees would guard machines Doe was using so that she could leave to use the bathroom and come back to the same machines."

     Colombo claims that Doe became so notorious at the casino that its "floor staff would monitor Doe's gambling to predict when she would next be coming in, and seek to change their own work schedules so as to be working when Doe was gambling in order to personally profit from her tips."
Ameristar cashed $3 million in checks for Doe in 2011 alone, Colombo claims.

     Although the casino "has policies and procedures to detect and aid problem gamblers," and knew Doe was a problem gambler, it "intentionally ignored its own policies, and intentionally refused to talk to Doe about her problem gambling," according to the complaint.

     "Ameristar's excessive and extraordinary inducement of Doe to gamble, Ameristar's willful blindness to the source of Doe's funds she used for gambling, and Ameristar's failure to follow its own policies caused or substantially contributed to Doe's embezzlement from plaintiff and plaintiff's transfer of funds to Ameristar," the complaint states.

     Colombo Candy seeks restitution, an accounting of all the money Doe blew at the casino, and damages for aiding and abetting, fraudulent transfer and unjust enrichment.

     It is represented by Jill Robb Ackerman with Baird Holm of Omaha, Neb

California Couple Arrested For Allegedly Embezzling $1.5 Million From County Health and Human Services Public Assistance Program

From The Inyo Register:



Dawndee Rossy (l) and Ken Rossy (r)

April 11, 2013

By Mike Gervais/Register Staff

Investigators with the Inyo County District Attorney’s Office arrested two residents Thursday afternoon in connection with alleged embezzlement at Inyo County Health and Human Services’ welfare office.

HHS Manager Dawndee Rossy, 46, of Bishop, has been charged with two counts of grand theft, 34 counts of identity theft, two counts of embezzlement, one count of possession of controlled substance, one count of welfare fraud and four counts of criminal conspiracy.

Her husband, Ken Rossy, 43, of Bishop, was also arrested. He is being charged with one count of grand theft, one county of welfare fraud, four counts of criminal conspiracy and one count possession of controlled substance.

Bail has been set at $500,000 each.

Sources close to the case who asked not to be named, said approximately $1.5 million was embezzled from the Health and Human Services Public Assistance Program.

Ohio Sports Booster Pleads Guilty To Embezzling More Than $400K

From the Associated Press:

Published 1:52 pm, Thursday, April 11, 2013

 

LEBANON, Ohio (AP) — Southwest Ohio prosecutors say a longtime high school sports booster has pleaded guilty in an embezzlement case.

 

The Warren County prosecutor's office says 61-year-old Thomas Harves of Springboro pleaded guilty to one count of aggravated theft. Common Pleas Judge James Flannery ordered a presentencing investigation.

 

Prosecutors say the man signed and cashed more than 300 unauthorized checks from the Spring Athletics Boosters account, totaling more than $400,000. They say he paid back much of the money.

He had served on the boosters' board as president and later treasurer.

 

Police say they found no evidence to suggest anyone else was involved in embezzling funds from the boosters. Board members had gone to the Springboro police department in 2012 with their concerns.

 

A message for comment was left Thursday at Harves' home.

Most Common Lies On Resumes - From AOL Jobs: Cites Marquet International Resume Lies Analysis

The Most Common Lies On Resumes

By Dan Fastenberg

Posted Apr 1st 2013 @ 8:01AM

Filed under: Employment News & Trends

It's the ultimate temptation of the job search -- lying on your resume. The tendency to embellish information on a resume is so widespread, nearly half (46 percent) of job applicants commit some form of resume fraud, according to ADP, the human capital management and research firm. Indeed, the topic is such a popular one that, as Business Insider points out, entering the phrase "lying on" into Google will lead to "lying on your resume" as the top hit.

Lying on a resume, of course, has a wide range, well beyond outright lies -- such as listing a fake degree. Marquet International, a security consulting firm, has compiled the 10 most common resume lies:

1. Stretching work dates.
2. Inflating past accomplishments and skills.
3. Enhancing job titles and responsibilities.
4. Exaggerating educational background.
5. Inventing periods of "self-employment" to cover up unemployment.
6. Omitting past employment.
7. Faking credentials.
8. Falsifying reasons for leaving prior employment.
9. Providing false references.
10. Misrepresenting a military record.


In a stubborn labor market, is it worth it? Can workers get away with it?

Some high-profile experiences suggest not. Before Marissa Mayer took over Yahoo, her predecessor, Scott Thompson, was forced last year to step down as CEO of the tech giant when it was revealed he never actually earned a degree in computer science from Stonehill College, as he had claimed. George O'Leary also was forced to step down as coach of Notre Dame, as was Dave Edmonson from the CEO position of Radio Shack, when it was revealed they lied about their education and qualifications.
​

More: Why Employers Do Credit and Background Checks

Specialists note that digital advances have allowed for greater scrutiny of job applications, raising the risks for lying. "People are asking us to check more things than they have historically so it would suggest they're more concerned about it," Ben Allen, President and CEO of the security firm Kroll, told CBS. (Allen has since left the firm.)

In fact, the Society for Human Resource Management says employee background checks of all kinds are way up over the past decade, from about two-thirds of all employers conducting a check a decade ago to 96 percent.

AOL Jobs contributor and career coach expert Miriam Salpeter has referred to the "paradox" of resume lying -- the worst-case scenario is that you get the job. Eventually, you will be found out. And it's for that reason that career experts strongly discourage job seekers from trying to cut a corner to get ahead.

Writing for Forbes after the Scott Thompson scandal at Yahoo, Mark Radcliffe said that the "incremental gain" of landing the job "seems to pale in comparison to the potential loss in credibility."

For Thompson, the bad news initially extended beyond his name becoming synonymous with "liar." In March of last year, Thompson was reported as having been diagnosed with thyroid cancer. But by July, he was given a clean bill of health, according to the Wall Street Journal, and was appointed CEO of ShopRunner Inc., an online-shopping website based out of Philadelphia.

Trial Set For Michigan Office Manager Accused Of Embezzling More Than $130K From Employer

Wayne Michael Balcom

Former Office Manager Going on Trial for Embezzlement

A former office manager accused of stealing more than $100,000 from his employer will go to trial.

 

A judge decided Thursday there is enough evidence to move the case forward against Wayne Michael Balcom of Potterville. Investigators say he embezzled more than $130,000 from the Holt Family Practice in Ingham County's Delhi Township.

The investigation started last August after owners of the clinic noticed the missing money.

Balcom has a prior conviction for check fraud. He could face up to 20 years in prison if convicted on the embezzlement charge.

We spoke to his family in March when charges were issued. They maintain his innocence. The doctor's office declined to comment.

From WILX10

Northern California Man Sought For Allegedly Defrauding Municipal Sanitation Department Out Of $350K

Ross Valley Sanitation District director wanted for embezzlement

Tuesday, April 09, 2013

MARIN COUNTY, Calif. (KGO) -- The man who used to hold the top job at a Marin County sanitation district is a fugitive and there is a $1 million warrant out for his arrest for stealing tax payer dollars.
Last July, Brett Richards, 45, abruptly resigned as the Ross Valley Sanitation District's executive director and disappeared. Now he is wanted on nine counts including money laundering and embezzling. There is also a $1 million warrant out for his arrest.
 
"We had heard he was in Florida in late summer, early fall. But the board had no contact with him," said Ross Valley Sanitation District board president Frank Eggers.

Eggers said a $350,000 loan was a perk intended to help Richards buy a home when he was hired in 2008. Instead, the district attorney says Richards laundered it through several bank accounts and never bought a home. Eggers, who was elected shortly before Richards resigned, says there was very little oversight.

"I questioned that. I said, 'Well, where's the security? Are we holding a second deed of trust?' because that's what I went looking for, a second deed of trust on a property, and found out we held no paper on any property," said Eggers.

"These people should be responsible for it and I think it's going to come out who actually signed off on the deal and they're going to have some explaining to do," said Ross Valley Sanitary District customer Jeff Martin.

"To see a public figure like that take the money and run, it's a huge travesty," said Ross Valley Sanitary District customer Mike Levin.

Now, the Ross Valley Sanitation Board is asking the state to audit it. On Monday it will meet to figure out how to get the money back, and how to prevent this from happening again.

From abc7

Former Accounting Firm Partner In New York Sentenced For Embezzling $938K From Client Accounts

By LAURA ITALIANO

Last Updated: 8:43 PM, April 10, 2013

Posted: 8:42 PM, April 10, 2013

A disgraced former partner for the prestigious Manhattan accounting firm Citrin Cooperman was carted off to serve at least three years prison today for embezzling almost a million dollars from two of his closest friends and the estate of convicted Westchester County wife-murderer Werner Lippe.

The $50,000 Matthew Weber admittedly stole from the Lippe estate while managing its account had been intended for the two surviving Lippe children; Weber additionally pillaged the accounts of a pal he'd known since college and a businessman who lived on his block in Oceanside, LI.

"He knew he had my confidence, but he is a pathological liar," the neighbor, Jordan Bardach, told Manhattan Supreme Court Justice Gregory Carro at an emotional sentencing hearing.
Bardach knew the thieving accountant for 15 years and only found out about his missing $60,200 when the IRS "emptied out my bank account" to recover the funds, he told the judge.

The hardest hit victim was attorney Andrew Targum, who'd known Weber 30 years and trusted him with his money since 1990, losing $828,128, some of which Weber admitted taking to pay country club fees.

"The revelations of these crimes have shattered my being," Targum angrily told the judge. "He turned out to be a sociopath, a charlatan and a con artist." Targum now spends sleepless nights, he said, worrying about losing his home and providing for his wife and children.

"I still owe the money he stole from me to the government," Targum said. "It will take me and my family and my business years to recover from the damage he has caused."

Given an opportunity to speak, Weber said he'd only ever intended to "borrow" the money, and promised, "I will try 100 percent to make amends." Weber's lawyer, Kevin Kearon said, "He is deeply remorseful." Weber must serve at least three years and as long as nine if probation keeps him in that long.

Both victims have sued Weber and Citrin Cooperman to recover their money. "This was done under their umbrella, in their offices, on their computers, and through their negligence," Bardach's lawyer, Robert Georges, told reporters.

From The New York Post

Former School Official In Ohio Pleads Guilty To Embezzling More Than $145K

Theft in office

Former Marietta schools’ assistant treasurer pleads guilty to taking $145,000

April 9, 2013

By Jasmine Rogers - The Marietta Times

 

Holding back sobs, a former Marietta City Schools employee pleaded guilty Monday in Washington County Common Pleas Court to slowly siphoning away more than $145,000 from the district for personal use.

 

"Please accept my guilty plea," said former Marietta City Schools assistant treasurer Barbara Mincks as Washington County Common Pleas Court Judge Randall Burnworth wrapped up the plea proceedings.

 

Burnworth did accept the plea, and now Mincks, 53, of 60 Warner Second St., Lower Salem, will be required to pay back the money she stole from the district.

 

That satisfies the school district, said Board of Education president Greg Gault.

"I think the No. 1 concern for the district was recovering the funds that had been stolen, and that appears to have been addressed," he said when contacted after the hearing.

As part of the restitution agreement, Mincks will sign over the rights to the retirement benefits she accrued during her 28 years working for the school district, said Washington County Prosecutor Jim Schneider.

Her retirement account is believed to be worth between $90,000 to $100,000, he added.

Mincks was indicted in December on a third-degree felony county of theft in office after officials from the Ohio Auditor's Office uncovered evidence of the possible theft during an October audit.

At that point, Mincks had been stealing money for more than five years, pointed out Schneider.

The thefts date back to June 2007, he said.

Mincks resigned in October to save the school district from going through the termination process, said her attorney, Rolf Baumgartel, at the time of her resignation. At that time, Mincks had a $37,000 annual salary.

All told, she stole $145,183.51 from the district by finding uncashed, long-outstanding checks and reissuing them to herself, he said.

"She prepared and created documents to cover that up and try to hide that," said Schneider.

Among other things, Mincks had used the money to pay off her daughter's student loans and to throw her daughter a lavish wedding ceremony, said Schneider.

The plea agreement also contained a sentencing component, he said.

On top of paying restitution, Mincks will have to spend 120 days in the Washington County Jail and she will be subject to three years community control, he said.

Burnworth approved the sentencing agreement pending the results of a pre-sentence investigation.

"If it would indicate a pattern of criminal behavior we're not aware of, that sentencing agreement can be revoked," he noted.

Mincks had faced a maximum of three years in prison and a $10,000 fine in the case.

The state asked the court to waive the fine so that precedence could be given to restitution, said Schneider.

"I'm glad she's making restitution," said Marietta City Schools Superintendent Harry Fleming. "It's a sad situation, and it's good we can put it behind us."

As assistant treasurer, Mincks was in charge of coordinating the education management information system (EMIS), said Fleming. The statewide data collection system includes demographic, attendance, course information, financial data and test results, according to the Ohio Department of Education.

That job has been filled on a temporary basis, he said.

Mincks is scheduled to be sentenced May 21 at 4 p.m.

From The Marietta Times

Hat tip: FraudTalk reader Joe.

Missouri Couple Charged With Embezzling $2.8 Million From Manufacturer To Support Lavish Lifestyle

Liberty couple charged in $2.8M embezzlement scheme

 

Posted: Apr 10, 2013 1:07 PM EDTUpdated: Apr 10, 2013 2:41 PM EDT

By Chris Oberholtz, Multimedia Producer

KANSAS CITY, MO (KCTV) -

A Liberty couple has been charged Wednesday with a nearly $2.8 million embezzlement and check kiting scheme to fund their gambling and lavish lifestyle.

MORE

 

Federal prosecutors charged Laura Dejong, 54, with one count of mail fraud. Both her and her husband, 55-year-old Craig Dejong, were also are charged with one count of filing a false tax return.
The two waived their right to a grand jury.
Laura Dejong allegedly embezzled $2,679,227 from her employer, Kansas City Screw Products, Inc., from January 2003 to November 2011.

The Kansas City company is a family-owned-and-operated metal fabrication business.

Laura Dejong, who was employed as a secretary and bookkeeper for about 23 years, allegedly forged checks drawn on the company's bank accounts.

According to federal prosecutors, Laura Dejong engaged in a check kiting scheme between the company's two banks in order to falsely inflate the company's bank account balances, increasing the amount of money she could embezzle.

Her check kite allegedly began in late June 2011.

The total amount of checks written by Laura Dejong to cause the check kite increased from $44,000 in June 2011 to $847,000 in November 2011, prosecutors say. The total loss from the check kite to the bank was $96,000.

The total combined loss for the company and bank was $2,775,227.

According to court documents, significant gambling activity, well into the millions of dollars, was identified for the Dejongs from January 2002 to December 2011.

The majority of the Dejongs' gambling was at slot machines, federal prosecutors said.
Court records indicate that the Dejongs took at least eight cruises and spent more than $100,000 on payments for the cruises, vacations and airfare between 2005 and 2011.

During the time of the embezzlement scheme, according to court documents, the Dejongs used the stolen money to purchase a 2007 Chevrolet Tahoe, a 2009 Honda Accord, a 1997 Crownline 20-foot boat, a 1997 Prestige boat trailer, a 1985 Chevrolet motor home, a 2008 Jayco travel trailer, four Ameriprise Brokerage accounts; four Kansas Speedway season tickets, four Kansas City Chiefs Club Level season tickets and parking passes, membership to the Chiefs Wolfpack Club, an exclusive members-only facility and their home.

Court records state the Dejongs filed joint tax returns for tax years 2005-2010 but did not declare any of the embezzled money as income.

During that time, Laura Dejong's gross annual salary ranged from $22,752 to $33,333. Craig Dejong was unemployed for four years and listed no income for the two years in which he claimed to be employed as a computer programmer.

As a result of allegedly filing false tax returns in those six years, the Dejongs owe the Internal Revenue Service a total of approximately $482,711.

From KCTV5

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

Cushing Woman Admits HOTCO Embezzlement

Former employee pleads guilty

Patti Weaver
1600kush.com
04/08/2013

(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

HR Manager For Scrap Metal Company In Wisconsin Charged With Embezzling More Than $1 million

Scrap recycling firm manager charged with $1 million embezzlement

United Milwaukee Scrap payroll checks went to human resources chief's account, authorities allege

By Bruce Vielmetti of the Journal Sentinel

April 8, 2013

 

The human resources manager for a major Milwaukee scrap recycling company has been charged with embezzling more than $1 million from the company over the past six years.

Jacqueline R. Fox, 44, of Milwaukee authorized direct deposits in the names of seven former employees to bank accounts Fox controlled, according to the criminal complaint, for a total of $996,689. Fox also made unauthorized payment to herself for another $12,944, charges indicate.

The practice might have continued indefinitely but for a chance misreading of a pay envelope by a worker last summer.

According to the complaint:
Fox began working at United Milwaukee Scrap, 3100 W. Concordia Ave., in 2005. As human resources manager, Fox would present weekly payroll data to the company's chief financial officer, David Arnstein, who would sign off and return it to Fox, whose job it was to then forward the payroll data to Paychex, a payroll processing company.

Paychex would then issue checks or direct deposits to the company's approximately 150 employees, and send the whole batch of checks and deposit receipts back to United Milwaukee Scrap. Normally, Fox would receive the checks and receipts.

One week in August, however, Vice President Steve Lewinsky received and distributed the materials. An employee picked up the wrong envelope, mistaking the address as his sister's. He returned it when he realized it was to a Jose Aguilera.

Investigating the rather large amount of the check - $4,370 - Lewinsky discovered Aguilera wasn't even on the company payroll anymore. Company officials then learned the account where the money was deposited was Fox's, and that much of the payroll information from Paychex didn't match United Milwaukee Scrap's records.

An agent from the state Department of Justice's Division of Criminal Investigation confronted Fox, who, after asking to talk with Arnstein first, admitted to thefts using Aguilera's name. She said she started when her husband kicked her and her children out of their home, and she had to find a place. She said the thefts only started in 2010, and she also used the money to support her paralyzed mother and pay for her daughter's tuition.

Fox denied any drug or gambling problems were behind her actions.

But further investigation turned up false payments in six other former employees' names, using different bank accounts and going back to 2006, according to the complaint. Investigators also found evidence Fox made frequent large withdrawals from an automated teller machine at Potawatomi Bingo Casino.

Susan Paprcka, a spokeswoman for United Milwaukee Scrap, said the company would not comment on the case.

The company was formed in 2003 by the merger of three smaller Milwaukee-area recycling operations. It now includes six plants in the Milwaukee area, a warehouse in Minnesota and sales offices in Boston and Detroit, according to its website.

Fox faces six counts of theft by fraud over $10,000, one for each year's worth of charged embezzlement. The maximum penalty for each count is five years in prison, five years of extended supervision and a $25,000 fine.

Fox made an initial court appearance Monday.

From the Milwaukee Journal-Sentinal

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Former Bank Exec In Georgia Sentenced For Embezzling More Than $5.8 Million

GAINESVILLE, GA—Former bank vice president Adam Teague was sentenced today to serve over five years in federal prison for conspiring to defraud Appalachian Community Bank. “Bank fraud is a critical problem throughout the United States, but it has hit Georgia especially hard,” said United States Attorney Sally Quillian Yates. “Our state has led the nation in bank failures since 2008, with 85 banks failing—including this one. This bank was robbed from the inside, not by a bandit carrying a gun, but a bank officer carrying a pen.” Mark F Giuliano, Special Agent in Charge, FBI Atlanta Field Office, stated, “Today’s sentencing of Mr Teague should serve as a stark reminder to others that such greed based criminal behavior as seen in this case comes with a cost.

Understanding the potential impact on the banking institution itself, the FBI will continue to dedicate extensive investigative resources toward addressing bank fraud in its many and varied forms.” Jon T Rymer, Inspector General for the Federal Deposit Insurance Corporation (FDIC) said, “The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join our law enforcement colleagues in announcing the sentence of this former bank official for his role in a complex bank fraud perpetrated through the failed Appalachian Community Bank. It is especially important to investigate and prosecute cases where trusted insiders abuse their positions to cause harm to the institution and undermine the integrity of the financial services industry as a whole. We are committed to preventing and addressing such threats to the safety and soundness of FDIC-insured banks throughout the country.” “Teague contributed to the failure of TARP-applicant Appalachian Community Bank by fraudulently masking the bank’s true financial condition while enriching himself,” said Christy Romero, Special Inspector General for TARP (SIGTARP). “Driven by greed and risky behavior, Teague engaged in an ‘extend and pretend’ scheme using the proceeds of new bank loans to hide past-due loans.

He also hid the bank’s growing inventory of foreclosed property by directing the bank to finance sales of the properties to buyers including two Teague-controlled shell companies, GPH [“God Please Help”] Investments and PHL [“Please Help Lord”] Investments. SIGTARP and our law enforcement partners will root-out fraud related to TARP, hold fraudsters accountable, and bring justice to American taxpayers.” Steve Linick, Inspector General Federal Housing Finance Agency said, “Protecting the integrity of the Federal Home Loan Bank system is critical to our nation’s economic recovery, and we, along with our law enforcement partners, will aggressively pursue anyone seeking to take advantage of that system.” According to United States Attorney Yates, the charges, and other information presented in court, Teague was senior vice president of Appalachian Community Bank, which was headquartered in Ellijay, Georgia. Due to its poor financial condition, Appalachian was forced to close on March 19, 2010, and the FDIC was appointed as receiver. The investigation of Appalachian’s loan transactions uncovered extensive fraudulent activity in which Teague was involved.

Concealment of Past-Due Loans In an attempt to prevent the FDIC from discovering certain past-due loans on Appalachian’s books, between June 2008 and August 2009, Teague and unindicted co-conspirator TN. arranged a number of sham real estate transactions and caused the bank to make approximately $7 million in fraudulent loans to unindicted coconspirator ML. Teague and ML. intended to make it appear as if ML.

had purchased certain properties from Appalachian’s foreclosure inventory and was making regular monthly payments on the new mortgages. Panama City Beach Condominiums In April 2009, Teague and unindicted co-conspirator TN. used shell corporations to purchase two condominiums in Panama City Beach, Florida, and caused Appalachian to finance them at a total cost of approximately $566,000. Approximately two months later, the two refinanced their mortgages and pocketed more than $875,000 which they then used to pay other personal debts, make monthly loan payments on the refinanced mortgages, pay condominium fees, and purchase new furniture for their condominiums.

GPH Investments LLC and PHL Investments LLC In August 2009, Teague and unindicted coconspirator TN. created two shell companies: GPH Investments LLC and PHL Investments LLC. GPH is an acronym for “God Please Help,” and PHL is an acronym for “Please Help Lord.” Teague and TN. then engaged in a sham real estate transaction designed to make it appear as if GPH had purchased 11 residential properties from Appalachian’s foreclosure inventory for a total of approximately $3.7 million.

Teague and TN. then caused Appalachian to loan GPH 90 percent of the purchase price and caused GPH to represent at closing that it was paying the other 10 percent of the purchase price out of its own funds, even though the two of them knew that to be untrue. The 10 percent down payment, closing costs, and monthly interest payments on this loan were all paid out of the proceeds from a $500,000 line of credit that Teague and unindicted co-conspirator TN. fraudulently caused Appalachian to extend to PHL.

Soak Creek Preserve Partners Land Flips Teague and three other individuals owned Soak Creek Preserve Partners LLC (Soak Creek), a Georgia limited liability company formed for the sole purpose of engaging land flips, that is, buying real estate and immediately reselling it at a higher price. Specifically, Soak Creek was formed to purchase and resell two adjoining tracts of land in Tennessee. One tract consisted of approximately 5,043 acres and the other tract consisted of approximately 2,160 acres. Before Soak Creek purchased either tract, Teague and his partners made arrangements to resell both tracts to an investment group from Texas.

Teague then caused Appalachian to make three separate $100,000 loans to unindicted co-conspirator BH. under false pretenses between March 7 and September 4, 2007. Teague knew that BH. was a silent partner in Soak Creek.

He also knew that in obtaining these loans from the bank, BH. was acting as a straw borrower for Soak Creek. Teague also knew that Soak Creek intended to use the proceeds of these loans as down payments on the 5,043 acres and the 2,160 acres. Teague did not disclose any of these facts to Appalachian Community Bank.

In fact, he actively hid his involvement in at least one of these loan transactions by altering the bank’s records to make it appear that someone else had acted as the loan officer. By not disclosing to Appalachian’s loan committee that he had a personal financial interest in these transactions, Teague violated the bank’s conflict-of-interest policy. To finance Soak Creek’s purchase of the 5,043 acres, on April 20, 2007, Teague caused Appalachian to wire transfer approximately $7.2 million of the bank’s money to the escrow account of the Tennessee law firm that handled the loan closing. He did not record this wire transfer in the bank’s books and records.

At the time of this transfer, Soak Creek’s account at Appalachian had a zero balance. Therefore, this wire transfer caused Soak Creek’s account to be overdrawn by approximately $7.2 million. The amount of this overdraft exceeded Teague’s lending authority at the bank. On April 24, 2007, Soak Creek flipped the 5,043 acres to the Texas investment group for approximately $9.3 million, thereby realizing a same-day profit of approximately $2 million.

To finance Soak Creek’s purchase of the 2,160 acres, on September 28, 2007, Teague caused Appalachian to wire transfer approximately $3 million of the bank’s money to the escrow account of the Tennessee law firm that handled the loan closing. He also did not record this wire transfer in Appalachian’s books and records. At the time of this wire transfer, there was only $4 in Soak Creek’s account at the bank. The wire transfer caused Soak Creek’s account to be overdrawn by approximately $3 million.

The amount of this overdraft exceeded Teague’s lending authority at the bank. On September 28, 2007, Soak Creek flipped the 2,160 acres to the Texas investment group for approximately $3.7 million, thereby realizing a same-day profit of approximately $500,000. Teague, 39, of Ellijay, was convicted on these charges on August 22, 2012, after he pleaded guilty. United States District Judge Richard W Story sentenced him to five years, ten months in prison, to be followed by five years of supervised release.

Teague was also ordered to forfeit $5,840,517.98, which is equal to the amount of the illegal proceeds he obtained as a result of the conspiracy, as well as all of the real property that he purchased with the proceeds of the conspiracy. This case was investigated by special agents of the Federal Bureau of Investigation, the Federal Deposit Insurance Corporation, Office of Inspector General, the Department of Treasury, Special Inspector General-Troubled Asset Relief Program, and the Federal Housing Finance Agency, Office of Inspector General. Assistant United States Attorneys Russell Phillips and Mike Brown prosecuted the case.

From the FBI

2 Louisiana Men Sentenced For Conspiring To Embezzle $571K From Local Bank

Former First Community CEO and Developer Sentenced for Fraud

By: Esther Cho 04/08/2013

A former bank president and a real estate developer in Louisiana were sentenced for conspiring to commit bank fraud, the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced Friday.

U.S. District Judge Nannette Jolivette Brown sentenced Reginald R. Harper, the former CEO of First Community Bank of Hammond, Louisiana, to 24 months in prison, while Troy A. Fouquet, a local developer, was sentenced to 18 months in prison.

Harper and Fouquet were also ordered to pay close to $571,000 in restitution.

In 2004, Harper loaned more than $2 million to Fouquet so he could buy land to develop into subdivisions and then build homes on them to sell to prospective homebuyers, according to court documents. When Harper and Fourquet were having trouble finding qualified homebuyers, they used “straw” buyers. Harper also made it appear as though prospective homebuyers had more money than they did when providing loans. To avoid reporting the delinquency on the loans, Fouquet provided insufficient checks, which Harper would accept and use to credit loan payments to First Community.
In a release, Christy Romero, Special Inspector General for TARP, said the scheme “caused significant losses to First Community Bank and jeopardized the bank’s financial stability and ability to serve its community.”

From DS News

Former Credit Union Exec In Texas Faces Trial For Embezzling $340K From Member Accounts

Former Houston CU Lending VP Faces May Embezzlement Trial

By Peter Strozniak

April 8, 2013

 

Shawn Lee Nelson, former vice president of lending for the $519 million Members Choice Credit Union in Houston, faces a jury trial in Texas Federal Court in May over allegations that he embezzled more than $340,000 from three member accounts.

According to court documents, Nelson has pleaded not guilty to 12 counts of embezzlement. Federal prosecutors allege the fraud was discovered in 2011.

Federal prosecutors allege the former credit union executive used the funds to pay credit card debt, taxes and other personal expenses.

Nelson is free on $100,000 bond. His trial is scheduled for May 13.

From Credit Union Times

2 Louisiana Men Plead Guilty To Embezzling More Than $661K From Housing Authority

Two former HANO employees plead guilty to embezzlement charges

By Richard A. Webster, NOLA.com | The Times-PicayuneThe Times-Picayun
April 08, 2013 at 11:43 AM, updated April 08, 2013 at 11:52 AM

Two former Housing Authority of New Orleans employees have pleaded guilty to charges they embezzled $661,904 from the agency over two years. Janice Staves, 55, and James Youngblood, 69, will be sentenced July 10; they face a maximum of five years in prison, a $250,000 fine, and three years of supervision after their release. They will be required to make full restitution for the money stolen.

 

The defendants agreed in their plea April 3 to inform the government of anyone who might be violating the law and assist in any investigation. In return, the government will bring to the attention of the court before sentencing any cooperation provided by the defendants and agrees not to bring any other charges against them in connection with their employment at HANO.

When asked if Staves is assisting in a broader investigation of HANO, her attorney, Marion Floyd, said, "No comment."

"Ms. Staves has accepted full responsibility for her actions in the case and is extremely remorseful," Floyd said. "She understands the severity of the restitution aspect and will take every step within her power to repay the amount in question."

Staves, who worked at HANO until 2009 and is currently employed at Delgado Community College, funneled money to Youngblood, her former co-worker, by creating false paperwork, including purchase orders for debris removal or supplies, according to a Feb. 27 bill of information filed in federal court. She secured the needed supervisor sign-off by including paperwork for the fake work along with paperwork for legitimate vendors.

HANO ended up issuing Youngblood 135 checks, The totals were kept under $15,000 so that no additional supervisor signature was needed, according to documents.

Youngblood would deposit the checks and bring Staves cash. The two would meet at the HANO office, in the parking lot, or the lots of nearby gas stations or restaurants, according to the document.
Staves deposited about $100,448 in cash into her bank accounts between 2007 and 2009. Youngblood also paid subcontractors to work on rental property she owned at the end of 2007, using money the two stole from the federal agency, prosecutors allege.

From the New Orleans Times-Picayune

Former County Supervisor In Virginia Sentenced For Embezzling $295K

Former Bedford County supervisor sentenced for embezzlement, money laundering

By Associated Press, Apr 08, 2013 04:14 PM EDT

BEDFORD, Va. — A former Bedford County supervisor convicted of embezzlement and money laundering will spend a year in jail.

Media outlets report that a Bedford County Circuit Court judge sentenced Earl Anthony Ware on Monday to 11 years on each of six embezzlement counts and six money laundering counts. The judge then suspended all but one year on each count. The sentences will run concurrently.

 

Ware also must pay more than $295,000 in restitution.

Ware was accused of taking money from a benefit fund set up for a family whose mother died. He also was accused of taking money from the Big Island Fire Department.

He pleaded no contest in January.

From the Associated Press