From the San Francisco Chronicle on 12/4/2014:
The former executive director of the Peninsula Symphony Association in Los Altos has been convicted of tax fraud and embezzling hundreds of thousands of dollars, authorities said Thursday.
Stephen Jay Carlton, 46, of Novato, faces up to 16 years in state prison when he is sentenced next year. He remains in custody until then.
Carlton was convicted this week of a misdemeanor and two felony counts for filing false tax returns. He was found guilty after a bench trial before Judge Allison Danner of Santa Clara County Superior Court.
Two months earlier, Carlton pleaded no contest to stealing $272,000 from the symphony.
The investigation began in September 2013 when a bank alerted a member of the symphony’s board that the organization’s funds had an “unusually low balance,” prosecutors said. Symphony officials contacted Los Altos police, and Carlton resigned.
Authorities determined that Carlton wrote numerous checks to himself from the symphony, using some of the money to pay off personal debts, including back taxes. Carlton forged the signatures of two board members on several checks and took out an unauthorized $25,000 loan.
One symphony endowment plunged from $227,000 to $375, while another dwindled from $195,000 to $395.
Carlton underreported wages from the symphony on state income tax returns from 2010 to 2012 and did not report the embezzled funds as income, authorities said.
The 65-year-old symphony hit a sour note with the embezzlement, which threatened its existence...
Read the whole story here.
Hat tip: FraudTalk reader Cheryl.
Thursday, December 4, 2014
County Official In Mississippi Indicted In $300K Embezzlement Conspiracy Case
From WTVA on 12/4/2014:
CORINTH, Miss. (WTVA) -- Five people, including an Alcorn County supervisor and the purchasing clerk, have been indicted in connection with an investigation into the embezzlement of county taxpayer money.
State Auditor Stacey Pickering announced 259 indictments had been handed down in connection with the year-long investigation into the case.
District Two Supervisor Jimmy Nelms, 47, of Glen faces 156 counts, including embezzlement and forgery.
Pickering says Nelms is accused of creating a scheme to collect payments from county vendors in exchange for getting county business.
He is also accused of billing the county for work that was never performed and rental equipment that was never actually rented.
Nelms is also accused of using fraudulent bidders to drive up the price of equipment bought by the county and using the county charge accounts to buy items for his home.
Pickering has issued a demand for Nelms to repay over $300,000 to the county, and he faces 600 years in prison if convicted.
Purchasing Clerk William Paul Rhodes, 55, of Corinth faces a 13 count indictment in connection with the investigation and has been asked to repay over $77,000 to the county.
He faces 60 years in prison if convicted.
Jimmy Ray Mitchell, 43, of Corinth, Joseph Lin McNair, Jr. 39, of Glen and Danny Roy Peters, 61, of Corinth also face multiple indictments in connection with the investigation.
The three are county vendors and face 150 years in prison if convicted.
CORINTH, Miss. (WTVA) -- Five people, including an Alcorn County supervisor and the purchasing clerk, have been indicted in connection with an investigation into the embezzlement of county taxpayer money.
State Auditor Stacey Pickering announced 259 indictments had been handed down in connection with the year-long investigation into the case.
District Two Supervisor Jimmy Nelms, 47, of Glen faces 156 counts, including embezzlement and forgery.
Pickering says Nelms is accused of creating a scheme to collect payments from county vendors in exchange for getting county business.
He is also accused of billing the county for work that was never performed and rental equipment that was never actually rented.
Nelms is also accused of using fraudulent bidders to drive up the price of equipment bought by the county and using the county charge accounts to buy items for his home.
Pickering has issued a demand for Nelms to repay over $300,000 to the county, and he faces 600 years in prison if convicted.
Purchasing Clerk William Paul Rhodes, 55, of Corinth faces a 13 count indictment in connection with the investigation and has been asked to repay over $77,000 to the county.
He faces 60 years in prison if convicted.
Jimmy Ray Mitchell, 43, of Corinth, Joseph Lin McNair, Jr. 39, of Glen and Danny Roy Peters, 61, of Corinth also face multiple indictments in connection with the investigation.
The three are county vendors and face 150 years in prison if convicted.
Wednesday, December 3, 2014
Former Oil Company Accountant In Louisiana Accused Of Embezzling Nearly $1.8 Million In Civil Action
From the Louisiana Record on 12/1/2014:
NEW ORLEANS – A local oil company is suing an accountant it claims embezzled a total of $1,798,000 betewen October 2009 and May 2014.
Clovelly Oil Co. LLC filed suit against Paul E. Gardner in the Orleans Parish Civil District Court on Sept. 11.
Clovelly, a limited liability company located at 650 Poydras St. in New Orleans, allegedly hired Paul E. Gardner in 2008 to provide accounting assistance for the company. As part of Gardner’s duties, he was given access to Clovelly’s bank accounts and had the capacity to make electronic payments via Automated Clearing House (ACH) in association with Whitney Bank, the suit says.
Beginning in 2009, Gardner allegedly made illicit, illegal and unauthorized deposits from Clovelly’s bank accounts, via the ACH, into his personal bank accounts, the suit claims. This allegedly continued for another four and a half years, culminating in over one hundred unauthorized withdrawals from Clovelly’s bank accounts.
Gardner has acknowledged his wrongdoing by arranging for partial repayment in the sum of $150,000 out of the $1,798,000, the suit says. However, Gardner has failed to pay back the debt in full and remains liable to Clovelly for the aforementioned amount as well as the lesser credit of $150,000.
Read the whole story here.
NEW ORLEANS – A local oil company is suing an accountant it claims embezzled a total of $1,798,000 betewen October 2009 and May 2014.
Clovelly Oil Co. LLC filed suit against Paul E. Gardner in the Orleans Parish Civil District Court on Sept. 11.
Clovelly, a limited liability company located at 650 Poydras St. in New Orleans, allegedly hired Paul E. Gardner in 2008 to provide accounting assistance for the company. As part of Gardner’s duties, he was given access to Clovelly’s bank accounts and had the capacity to make electronic payments via Automated Clearing House (ACH) in association with Whitney Bank, the suit says.
Beginning in 2009, Gardner allegedly made illicit, illegal and unauthorized deposits from Clovelly’s bank accounts, via the ACH, into his personal bank accounts, the suit claims. This allegedly continued for another four and a half years, culminating in over one hundred unauthorized withdrawals from Clovelly’s bank accounts.
Gardner has acknowledged his wrongdoing by arranging for partial repayment in the sum of $150,000 out of the $1,798,000, the suit says. However, Gardner has failed to pay back the debt in full and remains liable to Clovelly for the aforementioned amount as well as the lesser credit of $150,000.
Read the whole story here.
Minnesota Woman Sentenced For Embezzling $330K From Car Wash Business
From the CPA Practice Advisor on 12/1/2014:
Connie M. Rogers, 47, of Apple Valley, was sentenced Wednesday in Dakota County District Court to four years and nine months in prison for theft by swindle.
Rogers told the operators of Eagan-based Paradise Car Wash that she stole from them to pay for health insurance and medical bills, according to the criminal complaint. She pleaded guilty in June.
Her sentence includes paying restitution of $335,773.40.
Rogers was convicted in 2005 in Dakota County of misdemeanor unemployment fraud.
According to the complaint:
The carwash owner detected payroll discrepancies in December 2012 and suspected Rogers was writing checks to herself on a weekly basis totaling 423 in number for about $375,000. The owner confronted Rogers, who initially denied his allegation but later admitted to stealing from him from 2007 through most of 2012. She said she hoped to pay back the money.
Eagan police were able to verify nearly $334,000 in fraudulent bank deposits made by Rogers.
Read the whole story here.
A former payroll officer for a south metro carwash has been sentenced to prison for writing hundreds of unauthorized checks to herself that totaled more than $330,000.
Rogers told the operators of Eagan-based Paradise Car Wash that she stole from them to pay for health insurance and medical bills, according to the criminal complaint. She pleaded guilty in June.
Her sentence includes paying restitution of $335,773.40.
Rogers was convicted in 2005 in Dakota County of misdemeanor unemployment fraud.
According to the complaint:
The carwash owner detected payroll discrepancies in December 2012 and suspected Rogers was writing checks to herself on a weekly basis totaling 423 in number for about $375,000. The owner confronted Rogers, who initially denied his allegation but later admitted to stealing from him from 2007 through most of 2012. She said she hoped to pay back the money.
Eagan police were able to verify nearly $334,000 in fraudulent bank deposits made by Rogers.
Read the whole story here.
California Woman Pleads Guilty To Embezzling $876,000 From Auto Dealership; 16 Month Sentence Expected
From KHTS AM 1220 on 12/2/2014:
Melissa Ann Werner, 43, of Canyon Country, pleaded no contest two counts felony counts of grand theft by embezzlement, said Greg Risling, spokesman for the D.A.’s office.
“(In February), she’s slated to surrender to authorities to begin serving her sentence,” said Shiara Davila-Morales, D.A. spokeswoman.
Werner was arrested July 30, after theft was uncovered.
She filed her plea deal Oct. 17. She was being held in lieu of $245,000 bail.
Werner, who worked for Beau Boeckmann, president and CEO of Galpin Motors, was accused of stealing $876,000 from the auto executive.
In addition to the two counts, she admitted to a white collar crime enhancement for a theft exceeding $500,000.
Read the whole story here.
Update (2/6/2015): Werner was sentenced to 16 months in prison as expected. Read an update of the story here.
Melissa Ann Werner, 43, of Canyon Country, pleaded no contest two counts felony counts of grand theft by embezzlement, said Greg Risling, spokesman for the D.A.’s office.
“(In February), she’s slated to surrender to authorities to begin serving her sentence,” said Shiara Davila-Morales, D.A. spokeswoman.
Werner was arrested July 30, after theft was uncovered.
She filed her plea deal Oct. 17. She was being held in lieu of $245,000 bail.
Werner, who worked for Beau Boeckmann, president and CEO of Galpin Motors, was accused of stealing $876,000 from the auto executive.
In addition to the two counts, she admitted to a white collar crime enhancement for a theft exceeding $500,000.
Read the whole story here.
Update (2/6/2015): Werner was sentenced to 16 months in prison as expected. Read an update of the story here.
Idaho Man Pleads Guilty To Embezzling $280,000
From the Idaho State Journal on 12/3/2014:
Matthew Lewis Udy, 45, of Idaho Falls, pleaded guilty today to unauthorized use of an access device involved in the theft of more than $280,000 from his employer, U.S. Attorney Wendy J. Olson announced Tuesday.
According to the plea agreement, Udy was hired in December of 2009 in Idaho Falls as a business and financial manager and was entrusted to handle his employer’s personal investments, rental properties and other financial matters.
From April 2011 through September 2013, Udy stole $150,346.52 from his employer related to his employer’s rental properties. During the same time period, Udy fraudulently used five credit card accounts belonging to his employer, using the accounts to make unauthorized personal purchases. Udy used the accounts to receive $130,189 in payments or other things of value, including gift cards and hotel rooms.
When interviewed by law enforcement, Udy admitted to disguising fraudulent credit card transactions by mirroring legitimate transactions and only paying the accounts with his employer’s funds.
The charge of unauthorized use of an access device is punishable by up to 15 years in prison, a maximum fine of $250,000 and up to three years of supervised release.
Sentencing is set for Feb. 17, 2015, before U.S. District Judge Edward J. Lodge at the federal courthouse in Pocatello.
Read the whole story here.
Update (3/19/2015): Udy was sentenced to 27 months in prison:
Matthew Lewis Udy, 45, of Idaho Falls, was sentenced Tuesday in U.S. District Court to 27 months in prison followed by three years of supervised release for unauthorized use of an access device, U.S. Attorney Wendy J. Olson announced.
U.S. District Judge Edward J. Lodge also ordered Udy to pay $275,488 restitution to his victims. Udy pleaded guilty on Dec. 2.
According to the plea agreement, Udy was hired in December 2009 in Idaho Falls as a business and financial manager, and was entrusted to handle his employer’s personal investments, rental properties, and other financial matters. From April 2011 through September 2013, Udy stole $150,346 from his employer related to his employer’s rental properties.
Matthew Lewis Udy, 45, of Idaho Falls, pleaded guilty today to unauthorized use of an access device involved in the theft of more than $280,000 from his employer, U.S. Attorney Wendy J. Olson announced Tuesday.
According to the plea agreement, Udy was hired in December of 2009 in Idaho Falls as a business and financial manager and was entrusted to handle his employer’s personal investments, rental properties and other financial matters.
From April 2011 through September 2013, Udy stole $150,346.52 from his employer related to his employer’s rental properties. During the same time period, Udy fraudulently used five credit card accounts belonging to his employer, using the accounts to make unauthorized personal purchases. Udy used the accounts to receive $130,189 in payments or other things of value, including gift cards and hotel rooms.
When interviewed by law enforcement, Udy admitted to disguising fraudulent credit card transactions by mirroring legitimate transactions and only paying the accounts with his employer’s funds.
The charge of unauthorized use of an access device is punishable by up to 15 years in prison, a maximum fine of $250,000 and up to three years of supervised release.
Sentencing is set for Feb. 17, 2015, before U.S. District Judge Edward J. Lodge at the federal courthouse in Pocatello.
Read the whole story here.
Update (3/19/2015): Udy was sentenced to 27 months in prison:
Matthew Lewis Udy, 45, of Idaho Falls, was sentenced Tuesday in U.S. District Court to 27 months in prison followed by three years of supervised release for unauthorized use of an access device, U.S. Attorney Wendy J. Olson announced.
U.S. District Judge Edward J. Lodge also ordered Udy to pay $275,488 restitution to his victims. Udy pleaded guilty on Dec. 2.
According to the plea agreement, Udy was hired in December 2009 in Idaho Falls as a business and financial manager, and was entrusted to handle his employer’s personal investments, rental properties, and other financial matters. From April 2011 through September 2013, Udy stole $150,346 from his employer related to his employer’s rental properties.
Also, in the same period, Udy fraudulently used five credit-card accounts belonging to his employer to make unauthorized personal purchases.
Udy used the accounts to receive $130,189 in payments or other things of value, including gift cards and hotel rooms.
When interviewed by law enforcement, Udy admitted to disguising fraudulent credit-card transactions by mirroring legitimate transactions and only paying the accounts with his employer’s funds. The case was investigated by the Idaho Falls Police Department and the United States Secret Service.
Tennessee Woman Sentenced For Embezzling $370K From Credit Union
From the Citizen-Herald on 12/2/2014:
A former employee of a local credit union who pled guilty to embezzlement in late September has been sentenced in federal court.
A former employee of a local credit union who pled guilty to embezzlement in late September has been sentenced in federal court.
Latisha
Cochran, 36, of Cookeville, was sentenced to serve 27 months in a minimum
security facility in the case.
“She
publicly apologized and said she is sorry she affected people the way she did,”
her attorney, Wesley Bray, said. “She took responsibility for her actions.”
Cochran was
charged with embezzlement in late July and pled guilty in September, admitting
in court that she issued fradulent loans in the names of fictitious individuals
while employed at Middle Tennessee Federal Credit Union. She admitted she used
the funds from the fradulent loans for her own personal use and also used
fradulent credit cards associated with the loans to make personal purchases.
She also
admitted to taking actions to hide her embezzlement, including opening accounts
in fictitious names, using ficticious addresses, fabricating loan
documentation, conducting transactions outside of normal business hours, making
loan payments using embezzled funds and shredding loan files.
She
admitted to embezzling more than $370,000.
“She made a
payment today in that restitution,” Bray said, with the total restitution being
$300,000. “Her cooperation and lack of a criminal record also helped in her
sentencing.”
She faced
up to 30 years in prison and a fine of up to $1 million.
She is to
serve 80 percent of her sentence.
Monday, December 1, 2014
Michigan Woman Charged With Embezzling $210K To Pay Credit Card Bills
From the MLive on 11/26/2014:
A Grand Rapids woman has allegedly admitted to embezzling more than $210,000 from her employer, a printing supply company, to pay her personal credit card bills.
Amy Lynne Roselle, 49, is charged with embezzlement of more than $100,000 after the president of The Advantage Group reported in October that he and an accountant discovered she had allegedly been channeling money through a business account for her own use since September 2012, court documents state.
Roselle on Wednesday, Nov. 26, waived a probable cause hearing in Kent County District Court, sending the case to circuit court.
She allegedly deposited vendor checks from the Caledonia Township printing supply company into a Fifth Third Bank business account and used some of the funds to pay her credit card bills. Roselle, with her attorney present, earlier this month admitted to a Kent County sheriff's detective that she embezzled more than $210,000, according to a probable cause affidavit.
...
Read the whole story here.
Update (1/7/2015) from MLive.com:
A Grand Rapids woman stole more than $210,000 from the Caledonia lithograph and printing supply company where she worked now faces prison in addition to having to pay back the money she embezzled.
Amy Lynne Roselle, 49, tearfully pleaded guilty Wednesday, Jan. 7, before Kent County Circuit Court Judge Mark Trusock to embezzlement of more than $100,000, the harshest embezzlement charge under Michigan law which carries a maximum sentence of 20 years in prison.
There was no plea agreement with the Kent County prosecutor’s Office, but Roselle’s attorney George Krupp told the judge that his client was transferring $32,000 from her retirement account to pay back some of the amount taken.
Krupp said it is hoped that will factor favorably into Trusock’s decision when he sentences Roselle on March 5.
The crime came to light after the president of The Advantage Group company, Mark Vanderbur, in Caledonia Township, was informed by an accountant that Roselle had been channeling money through a business account for her own use since September 2012, according to court records.
She allegedly deposited vendor checks from the submitted by customers into a Fifth Third Bank business account and used the funds to pay her credit card bills as well as other personal expenses.
...
A Grand Rapids woman has allegedly admitted to embezzling more than $210,000 from her employer, a printing supply company, to pay her personal credit card bills.
Amy Lynne Roselle, 49, is charged with embezzlement of more than $100,000 after the president of The Advantage Group reported in October that he and an accountant discovered she had allegedly been channeling money through a business account for her own use since September 2012, court documents state.
Roselle on Wednesday, Nov. 26, waived a probable cause hearing in Kent County District Court, sending the case to circuit court.
She allegedly deposited vendor checks from the Caledonia Township printing supply company into a Fifth Third Bank business account and used some of the funds to pay her credit card bills. Roselle, with her attorney present, earlier this month admitted to a Kent County sheriff's detective that she embezzled more than $210,000, according to a probable cause affidavit.
...
Read the whole story here.
Update (1/7/2015) from MLive.com:
A Grand Rapids woman stole more than $210,000 from the Caledonia lithograph and printing supply company where she worked now faces prison in addition to having to pay back the money she embezzled.
Amy Lynne Roselle, 49, tearfully pleaded guilty Wednesday, Jan. 7, before Kent County Circuit Court Judge Mark Trusock to embezzlement of more than $100,000, the harshest embezzlement charge under Michigan law which carries a maximum sentence of 20 years in prison.
There was no plea agreement with the Kent County prosecutor’s Office, but Roselle’s attorney George Krupp told the judge that his client was transferring $32,000 from her retirement account to pay back some of the amount taken.
Krupp said it is hoped that will factor favorably into Trusock’s decision when he sentences Roselle on March 5.
The crime came to light after the president of The Advantage Group company, Mark Vanderbur, in Caledonia Township, was informed by an accountant that Roselle had been channeling money through a business account for her own use since September 2012, according to court records.
She allegedly deposited vendor checks from the submitted by customers into a Fifth Third Bank business account and used the funds to pay her credit card bills as well as other personal expenses.
...
Netflix Sues Former VP of IT Operations Over Alleged Vendor Fraud & Kickback Scheme
From Bloomberg on 11/26/2014:
Netflix Inc. (NFLX) sued former technology executive Mike Kail, who joined Yahoo! Inc. (YHOO), for fraud, claiming he took cash kickbacks from two suppliers and had deals to receive stock, money or gift cards from other vendors.
Kail received commissions worth 12 percent to 15 percent of payments made to two companies, Netflix said in a complaint filed Nov. 24 in state court in San Jose, California. The vendors received almost $4 million in payments since 2012, said Netflix, the world’s largest subscription streaming service.
Kail, a former vice president of information technology operations, was in charge of negotiating contracts with companies that supplied products and services supporting Netflix’s computer systems, Netflix said. He hid the payments by having them paid to his personal consulting company Unix Mercenary LLC, according to the lawsuit. Kail left Netflix in August to join Yahoo as chief information officer.
E-mails showed that Kail would approve payments to the vendors and then invoice them for his cut, according to the lawsuit. In one November 2013 e-mail, Kail wrote a vendor that he’d approved its invoices “so would be good to understand who to work with on getting my portion paid.”
Anne Espiritu, a spokeswoman for Sunnyvale, California-based Yahoo, declined to comment. A voice-mail message left at Yahoo for Kail wasn’t immediately returned.
The commissions belonged to Netflix, the Los Gatos, California-based company said in the complaint, which alleges fraud, breach of fiduciary duty, unjust enrichment and unfair business practices, and seeks unspecified damages.
...
Read the whole story here.
Netflix Inc. (NFLX) sued former technology executive Mike Kail, who joined Yahoo! Inc. (YHOO), for fraud, claiming he took cash kickbacks from two suppliers and had deals to receive stock, money or gift cards from other vendors.
Kail received commissions worth 12 percent to 15 percent of payments made to two companies, Netflix said in a complaint filed Nov. 24 in state court in San Jose, California. The vendors received almost $4 million in payments since 2012, said Netflix, the world’s largest subscription streaming service.
Kail, a former vice president of information technology operations, was in charge of negotiating contracts with companies that supplied products and services supporting Netflix’s computer systems, Netflix said. He hid the payments by having them paid to his personal consulting company Unix Mercenary LLC, according to the lawsuit. Kail left Netflix in August to join Yahoo as chief information officer.
E-mails showed that Kail would approve payments to the vendors and then invoice them for his cut, according to the lawsuit. In one November 2013 e-mail, Kail wrote a vendor that he’d approved its invoices “so would be good to understand who to work with on getting my portion paid.”
Anne Espiritu, a spokeswoman for Sunnyvale, California-based Yahoo, declined to comment. A voice-mail message left at Yahoo for Kail wasn’t immediately returned.
The commissions belonged to Netflix, the Los Gatos, California-based company said in the complaint, which alleges fraud, breach of fiduciary duty, unjust enrichment and unfair business practices, and seeks unspecified damages.
...
Read the whole story here.
Former Indiana Municipal CFO Embezzled $343K From Township Coffers Due To "Complete Lack Of Checks & Balances"
From the Indianapolis Star on 11/30/2014:
In the wake of a Center Township employee pleading guilty to federal corruption charges, the State Board of Accounts has released an audit that explains how he was able to afford a house, jewelry and exotic vacations on the public's dime while evading detection for four years.
In short, a complete lack of checks and balances.
Alan Mizen, the township's chief financial officer for nearly a decade, had access to blank checks and the authority to write and sign them on his own using an electronic copy of the trustee's signature, the audit found.
He also balanced the books himself and could adjust the city's accounting records without any oversight. He compiled the township's budget and wrote the township's annual financial report.
With a three-member accounting staff, the audit found, some of those duties should have been assigned to Mizen's employees.
"Segregation of duties provides the foundation of good internal control by assuring that no one individual has the capability to perpetuate and conceal errors or irregularities in the normal course of their authorized duties," auditors wrote.
Mizen's "unfettered access to the computer system" allowed him to cut a single check for $343,541.08 to "Attorney's General Clearing Tr" in July 2010, the audit found. He entered a fake invoice into the computer system, saying the money was paid to the state treasurer for court administration, judicial salaries and other fees.
He deposited the money into an account titled "Alan S Mizen DBA Attorney's General Clearing Tr." And then he went on a shopping spree.
He bought a house in Zionsville, a Toyota Tacoma pickup truck and $8,900 in jewelry. He also financed his child's college education and took vacations to the Caribbean and the Cayman Islands, according to the criminal complaint against him.
It's unclear why Center Township didn't have better checks and balances in place. But an attorney for the township said Trustee Eugene Akers has implemented reforms to ensure such wrongdoing doesn't happen again.
"He (Akers) was the one who requested the audit to be performed," said John Lowery, an attorney with Lee and Fairman. "He has made changes since taking office and will continue to make changes as seen to be necessary."
The theft occurred under a prior administration. Lowery said Mizen only worked for the township for about a month after Akers took office.
Mizen, 59, took the CFO position in November 2001 and was terminated in January 2011.
The federal investigation was initiated after a suspicious check was found during a regular examination of Center Township financial records.
Last month he pleaded guilty to federal public corruption charges. He faces up to 10 years in federal prison and up to a $250,000 fine. He also was ordered to repay the money he stole, plus $54,978.41 to pay off the state's investigation costs.
...
Read the whole story here.
In the wake of a Center Township employee pleading guilty to federal corruption charges, the State Board of Accounts has released an audit that explains how he was able to afford a house, jewelry and exotic vacations on the public's dime while evading detection for four years.
In short, a complete lack of checks and balances.
Alan Mizen, the township's chief financial officer for nearly a decade, had access to blank checks and the authority to write and sign them on his own using an electronic copy of the trustee's signature, the audit found.
He also balanced the books himself and could adjust the city's accounting records without any oversight. He compiled the township's budget and wrote the township's annual financial report.
With a three-member accounting staff, the audit found, some of those duties should have been assigned to Mizen's employees.
"Segregation of duties provides the foundation of good internal control by assuring that no one individual has the capability to perpetuate and conceal errors or irregularities in the normal course of their authorized duties," auditors wrote.
Mizen's "unfettered access to the computer system" allowed him to cut a single check for $343,541.08 to "Attorney's General Clearing Tr" in July 2010, the audit found. He entered a fake invoice into the computer system, saying the money was paid to the state treasurer for court administration, judicial salaries and other fees.
He deposited the money into an account titled "Alan S Mizen DBA Attorney's General Clearing Tr." And then he went on a shopping spree.
He bought a house in Zionsville, a Toyota Tacoma pickup truck and $8,900 in jewelry. He also financed his child's college education and took vacations to the Caribbean and the Cayman Islands, according to the criminal complaint against him.
It's unclear why Center Township didn't have better checks and balances in place. But an attorney for the township said Trustee Eugene Akers has implemented reforms to ensure such wrongdoing doesn't happen again.
"He (Akers) was the one who requested the audit to be performed," said John Lowery, an attorney with Lee and Fairman. "He has made changes since taking office and will continue to make changes as seen to be necessary."
The theft occurred under a prior administration. Lowery said Mizen only worked for the township for about a month after Akers took office.
Mizen, 59, took the CFO position in November 2001 and was terminated in January 2011.
The federal investigation was initiated after a suspicious check was found during a regular examination of Center Township financial records.
Last month he pleaded guilty to federal public corruption charges. He faces up to 10 years in federal prison and up to a $250,000 fine. He also was ordered to repay the money he stole, plus $54,978.41 to pay off the state's investigation costs.
...
Read the whole story here.
Saturday, November 29, 2014
Florida Man Pleads Guilty To $1.5 Million Embezzlement Scheme
From the Associated Press on 11/29/2014:
A central Florida man faces 20 years in prison for embezzling more than $1.5 million from a local art gallery.
The U.S. Attorney’s Office reports that 48-year-old Jeffrey Hall of Maitland has pleaded guilty to mail fraud and agreed to pay restitution for the embezzlement scheme.
Authorities say Hall used his position at the art gallery over a two-year period to divert proceeds from artwork sales to his own personal bank accounts. According to court documents, he also used the gallery’s artwork as collateral for himself and sold some of the pieces on eBay.
Hall is scheduled to be sentenced on Feb. 19. He faces a maximum of 20 years in prison.
A central Florida man faces 20 years in prison for embezzling more than $1.5 million from a local art gallery.
The U.S. Attorney’s Office reports that 48-year-old Jeffrey Hall of Maitland has pleaded guilty to mail fraud and agreed to pay restitution for the embezzlement scheme.
Authorities say Hall used his position at the art gallery over a two-year period to divert proceeds from artwork sales to his own personal bank accounts. According to court documents, he also used the gallery’s artwork as collateral for himself and sold some of the pieces on eBay.
Hall is scheduled to be sentenced on Feb. 19. He faces a maximum of 20 years in prison.
Friday, November 28, 2014
Michigan Podiatrist Loses License After $135K Embezzlement Conviction From "Vulnerable Adult"
From MLive on 11/28/14:
The Michigan Department of Licensing and Regulatory Affairs has immediately suspended a Portage podiatrist's license based on her conviction on embezzlement charges Kalamazoo County Circuit Court.
Dr. Regina Lynne Spears, also known as Regina Lynne Spears-Everett, was convicted on July 11 of one count of embezzlement from a Vulnerable Adult — $20,000 or more, a felony and sentenced in Sept. 9, 2014, to serve nine months in jail, five years probation, and ordered to pay fines, costs and restitution totaling $169,572.18.
From January 2010 to January 2011, Spears-Everett, 51, stole more than $135,000 in cash from the life savings of Toni A. Verdries, a 91-year-old woman with dementia who Spears-Everett is believed to have first met in the 1990s at a doctor's office.
It took a jury less than two hours to find Spears-Everett guilty.
According to prosecutors and an investigation by the Portage Department of Public Safety, the doctor lavished some of the money she took on friends and family-- including an $18,000 car for a friend and $21,500 to pay a relative's outstanding debt.
She spent more than $2,500 on chocolates from a fudge company in South Carolina, authorities said.
Michigan's Public Health Code provides for the mandatory summary suspension of a health professional's license upon the conviction of a felony.
...
Read the whole story here.
The Michigan Department of Licensing and Regulatory Affairs has immediately suspended a Portage podiatrist's license based on her conviction on embezzlement charges Kalamazoo County Circuit Court.
Dr. Regina Lynne Spears, also known as Regina Lynne Spears-Everett, was convicted on July 11 of one count of embezzlement from a Vulnerable Adult — $20,000 or more, a felony and sentenced in Sept. 9, 2014, to serve nine months in jail, five years probation, and ordered to pay fines, costs and restitution totaling $169,572.18.
From January 2010 to January 2011, Spears-Everett, 51, stole more than $135,000 in cash from the life savings of Toni A. Verdries, a 91-year-old woman with dementia who Spears-Everett is believed to have first met in the 1990s at a doctor's office.
It took a jury less than two hours to find Spears-Everett guilty.
According to prosecutors and an investigation by the Portage Department of Public Safety, the doctor lavished some of the money she took on friends and family-- including an $18,000 car for a friend and $21,500 to pay a relative's outstanding debt.
She spent more than $2,500 on chocolates from a fudge company in South Carolina, authorities said.
Michigan's Public Health Code provides for the mandatory summary suspension of a health professional's license upon the conviction of a felony.
...
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New Mexico Woman Charged With Embezzling $200+K From Magazine
From the Associated Press on 11/27/2014:
A bookkeeper is accused of embezzling more than $200,000 from an Albuquerque lifestyle magazine.
The Albuquerque Journal reports (http://bit.ly/1259fUq) that 50-year-old Bonnie Burchell was released on bail Wednesday on a felony charge of embezzlement.
According to a criminal complaint, the publisher of Albuquerque the Magazine says an audit found Burchell had been paying herself three times her salary between March 2012 and this summer.
She also is accused of making more than 30 deposits from the magazine into her bank account and an account in her ex-husband's name.
Tom Clear, an attorney for Burchell, told police that she had evidence showing the magazine had committed tax fraud.
But Burchell was arrested Tuesday.
A call to Clear went unreturned Wednesday.
Burchell was hired in December 2011.
A bookkeeper is accused of embezzling more than $200,000 from an Albuquerque lifestyle magazine.
The Albuquerque Journal reports (http://bit.ly/1259fUq) that 50-year-old Bonnie Burchell was released on bail Wednesday on a felony charge of embezzlement.
According to a criminal complaint, the publisher of Albuquerque the Magazine says an audit found Burchell had been paying herself three times her salary between March 2012 and this summer.
She also is accused of making more than 30 deposits from the magazine into her bank account and an account in her ex-husband's name.
Tom Clear, an attorney for Burchell, told police that she had evidence showing the magazine had committed tax fraud.
But Burchell was arrested Tuesday.
A call to Clear went unreturned Wednesday.
Burchell was hired in December 2011.
Wednesday, November 26, 2014
Fraud Talk Episode To Focus On Resume Fraud and the Top Ten Resume Lies
Join me Monday, December 1st at 10 a.m. EST for our next Fraud Talk episode which will be all about Resume Fraud and the Top Ten Resume Lies. My special guest will be Wendy Pickering Sullivan, my old colleague at Kroll Associates and an expert in due diligence investigations, background checks and fact finding. We will also feature some case studies and stories, including some from our Resume Liar's Club. Listen live or at your leisure to the audio file here: http://www.voiceamerica.com/show/2349/fraudtalk.
Tuesday, November 25, 2014
Kansas Woman Pleads Guilty To Embezzling More Than $500K From Trucking Concern
From the Great Bend Tribune on 11/25/2014:
A La Crosse woman pleaded guilty Monday to embezzling more than $500,000 from the company where she worked, U.S. Attorney Barry Grissom said.
Crystal Lynn Jones, 34, La Crosse, pleaded guilty to one count of interstate transportation of stolen money. In her plea, she admitted the crime occurred from 2008 to 2013 while she was officer manager for Teel’s Trucks at 1200 Vine Street in Hays. She wrote unauthorized checks from Teel’s company accounts at Commerce Bank and the Bank of Hays for her personal benefit. She also conducted transfers on the Automated Clearing House electronic network from Teel’s accounts for her own personal benefit. She hid the thefts by altering entries on the company’s accounting software and by forging checks.
Sentencing is set for March 2, 2015. She faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the FBI and Assistant U.S. Attorney Rich Hathaway for their work on the case.
A La Crosse woman pleaded guilty Monday to embezzling more than $500,000 from the company where she worked, U.S. Attorney Barry Grissom said.
Crystal Lynn Jones, 34, La Crosse, pleaded guilty to one count of interstate transportation of stolen money. In her plea, she admitted the crime occurred from 2008 to 2013 while she was officer manager for Teel’s Trucks at 1200 Vine Street in Hays. She wrote unauthorized checks from Teel’s company accounts at Commerce Bank and the Bank of Hays for her personal benefit. She also conducted transfers on the Automated Clearing House electronic network from Teel’s accounts for her own personal benefit. She hid the thefts by altering entries on the company’s accounting software and by forging checks.
Sentencing is set for March 2, 2015. She faces a maximum penalty of 10 years in federal prison and a fine up to $250,000. Grissom commended the FBI and Assistant U.S. Attorney Rich Hathaway for their work on the case.
Former Delaware Bank CEO Sentenced In $1.5 Million Fraud Case
From the News Journal on 11/25/2014:
A former bank chief executive was sentenced Monday to two years in prison for a scheme involving the use of his bank's money to pay personal debts.
James A. Ladio, 58, who founded and headed MidCoast Community Bank in Wilmington, received what some considered a stiff sentence, considering his substantial cooperation into the federal investigation of Wilmington Trust Co.
Ladio pleaded guilty last year to two counts of bank fraud and two counts of money laundering. He had asked U.S. District Judge Richard Andrews for home detention or community confinement. Instead, Ladio will report to prison on Jan. 9.
"This is a tough day for me," said Ladio, who seemed more self-assured than he did at his plea hearing last year. "I will never, ever be able to accept the actions I did. Remorse is something that eats you from inside."
Ladio said he had gotten himself into "desperate financial circumstances" following years of mounting debt that began with a divorce. In a letter to the judge, Ladio said the debt was always manageable until he invested beyond his means in the start-up of MidCoast. When the recession hit, he was forced to borrow more money to meet his loan obligations, he said.
Unable to pay the loans he owed Wilmington Trust, Ladio convinced two MidCoast customers to withdraw loan proceeds from the bank and turn the money over to him as private loans, prosecutors say. He then used the private loan money to pay off his obligations at Wilmington Trust.
The "agonizing" reflection Ladio did over the last year resulted in the decision to make amends, he told Andrews. That meant cooperating with the government in its Wilmington Trust probe and starting a business that would allow him to repay his debts.
"During this time, I decided to move forward – I willed myself," Ladio said.
...
Read the whole story here.
A former bank chief executive was sentenced Monday to two years in prison for a scheme involving the use of his bank's money to pay personal debts.
James A. Ladio, 58, who founded and headed MidCoast Community Bank in Wilmington, received what some considered a stiff sentence, considering his substantial cooperation into the federal investigation of Wilmington Trust Co.
Ladio pleaded guilty last year to two counts of bank fraud and two counts of money laundering. He had asked U.S. District Judge Richard Andrews for home detention or community confinement. Instead, Ladio will report to prison on Jan. 9.
"This is a tough day for me," said Ladio, who seemed more self-assured than he did at his plea hearing last year. "I will never, ever be able to accept the actions I did. Remorse is something that eats you from inside."
Ladio said he had gotten himself into "desperate financial circumstances" following years of mounting debt that began with a divorce. In a letter to the judge, Ladio said the debt was always manageable until he invested beyond his means in the start-up of MidCoast. When the recession hit, he was forced to borrow more money to meet his loan obligations, he said.
Unable to pay the loans he owed Wilmington Trust, Ladio convinced two MidCoast customers to withdraw loan proceeds from the bank and turn the money over to him as private loans, prosecutors say. He then used the private loan money to pay off his obligations at Wilmington Trust.
The "agonizing" reflection Ladio did over the last year resulted in the decision to make amends, he told Andrews. That meant cooperating with the government in its Wilmington Trust probe and starting a business that would allow him to repay his debts.
"During this time, I decided to move forward – I willed myself," Ladio said.
...
Read the whole story here.
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