Sunday, March 30, 2014

Comprehensive Article About Embezzlement Epidemic In Vermont

Read this Valley News article from 3.30.14 which comprehensively discusses the apparent embezzlement epidemic in Vermont.  The report reads in part:
Based on cases that were in the judicial system in 2012, Vermont was ranked ninth in the country in risk for loss by embezzlement, according to a recently released report from Marquet International, a consulting firm based in New York City and Boston headed by Christopher T. Marquet, an attorney with more than 30 years of experience in business intelligence and security consulting. 
When all cases from 2008 through 2012 are considered, the report says, Vermont was number two, behind only Iowa. That state convicted Russell Wasendorf of siphoning off $215.5 million from 10,000 clients of the Peregrine Financial Group, a case which skewed the figures during the period.
By the way, one correction here: I am not an attorney.

Wednesday, March 5, 2014

Seminar In Boston: Bosses Behaving Badly - Detecting, Deterring & Mitigating the Risks of Executive Misconduct

On Thursday, March 27 and Friday, March 28, we are hosting a complimentary breakfast briefing seminar in the Boston area entitled: Bosses Behaving Badly: Detecting, Deterring, and Mitigating the Risks of Executive Misconduct.  I have collaborated with industry experts in computer forensics and employment law to host this special event.  The presentation will be held 3 times, morning, midday and afternoon.

For a description, go here and to register, go here.  There is no charge but space is limited for each session.  I hope to see you there.
- Chris

Tuesday, March 4, 2014

Former Program Director For Florida Non-Profit Sentenced To 6 Years For Embezzling $200K To Support Lifestyle

From the Tampa Bay Times on 3/4/14:

Before she sentenced Kimberly Sue Ross, Pinellas Circuit Judge Nancy Moate Ley gave her a history quiz.

Who was James B. Sanderlin? the judge asked.

Ross blotted the tears on her cheeks. She knew that Sanderlin was the first African-American judge in circuit court. She also knew that he was the namesake of the nonprofit organization that provides a wealth of free services to low-income families. It's the same organization from which she admitted embezzling $200,000.

Ross, 47, was sentenced Monday to six years in prison for grand theft from the James B. Sanderlin Neighborhood Family Center. Her sentence includes a third-degree felony charge from January 2012 for failing to redeliver leased property.

In a case Ley called aggravating, Ross said she was unaware that she wrote 232 fraudulent checks totaling $200,337 in four years. Financial crimes investigator John Pickart said Ross monitored the account balances, wrote checks sequentially with the same dollar amount and even wrote checks directly payable to Progress Energy for her electric bill.

Ross, who worked at the center as a program manager responsible for handling the budget, paying the bills and supervising administration, lived an $80,000 income lifestyle while earning an average annual salary of $40,000.

She spent the money on furniture, fast food, jewelry, an Xbox, bowling, Netflix, a hair salon, cable TV, flowers, Adventure Island, a pet store, and the flea market, Pickart said.

Read the whole story here.

Hat tip: FraudTalk reader Joe.

Former Head Of Wisconsin Little League Organization Accused Of Embezzling $200K

From on 3/4/14:

The former president of a Little League organization in Madison is facing charges for allegedly embezzling $200,000 of the league's funds.

Stephen Verhage, 59, of Madison, is facing multiple felony counts of theft and fraudulent writings, Madison police said in a news release.

Verhage was president of the Kennedy Little League, 5801 Commercial Ave., which has 60 baseball teams and about 650 players.

"In November of 2012, police got a complaint regarding the embezzlement of funds," said police spokesman Joel DeSpain. "Information provided to the case detective indicated the fraudulent activity dated back to at least 2005."

The investigation into the complaint just wrapped up, with police determining about $200,000 had been taken from the organization, allegedly by Verhage.

Former Municipal Treasurer In California Charged With Embezzling $212K From Non-profit - Returns Money Before Arrest

From the San Diego Union-Tribune on 3/3/14:

Former Carlsbad city treasurer James Comstock allegedly stole more than $212,000 from a nonprofit arts group where he volunteered, but returned the money before his arrest in December, a county prosecutor said Monday.

The new details in the case emerged this week after state officials announced Comstock has been barred from practicing accounting until the criminal charges against him are resolved. A preliminary hearing has been set for April 30, Deputy District Attorney Bill Mitchell said.
Comstock has been charged with two felony counts of grand theft of personal property and two felony counts of embezzlement. He was released on $120,000 bail shortly after his Dec. 18 arrest, Mitchell said.
The charges against Comstock are unrelated to his work as city treasurer, a job he held from late 2010 until he resigned in early 2013. The charges are related to accounting he did for Carlsbad’s ArtSplash education nonprofit, which holds an annual two-day fundraiser for local schools each fall.
Read the whole story here.

Tulsa World Article Profiles Crime Of Embezzlement; Highlights Major Cases In Oklahoma In Recent Years

From Tulsa World on 3/3/14:

Embezzlement is the ultimate crime of opportunity.

People who probably wouldn't even dream of robbing a bank will succumb to temptation and help themselves to stacks of their employer's money. Sometimes the perpetrators are motivated by financial need, perhaps caused by addiction. On other occasions, it's pure greed. Other times, the motivation to steal is not so easy to explain.
Some of the most notable cases filed in recent years in Tulsa federal court that involved stealing an employer's money:
  • James R. Cooley, 45, pleaded guilty in November to a wire fraud charge connected to his embezzlement of nearly $700,000 from Newfield Exploration Co. Cooley was employed as the regional human resources manager in Newfield's Tulsa office from September 2007 until January 2011. Cooley admitted in his plea agreement that beginning in the autumn of 2008, he began to create false invoices and would then submit them on behalf of a consulting company he created. Cooley is scheduled to be sentenced on April 23. 
  • James Lamar "Marty" Gresham, 52, pleaded guilty in September to a bank fraud charge, admitting that he stole more than $1.5 million over nearly four years by forging more than 500 checks drawn on an account of his then-employer, Frontier International Trucks in Tulsa. Gresham's job as controller at the company at the time allowed him access to the company's financial records and bank accounts, prosecutors said. He is scheduled to be sentenced on April 24.
  • Wesley Scott McGinness, 67, a former executive director of the HOW Foundation, was sentenced in November 2012 to one year and three months in prison for defrauding the agency of more than $1.5 million over nearly eight years. He admitted in his plea agreement that he "gambled heavily at casinos in the Tulsa area," using credit cards, and then wrote checks on HOW's account to pay for his gambling habit. He admitted writing $1,359,714.89 in unauthorized checks and embezzling about $224,000 from the cash receipts from the organization's thrift store. 
  • Janice Mora Adams, 56, was sentenced in July 2012 to four years and nine months in prison and was ordered to pay more than $3 million in restitution after pleading guilty to misapplying funds while she worked as a senior vice president for private banking and internal control officer at Peoples Bank. She stated in court documents that she initiated fraudulent loans and accounts as part of a scheme in which she embezzled funds from May 2004 until February 2010.
  •  Floyd Lee Cleghorn, 47, was sentenced in October 2011 to 18 months in prison and was ordered to pay $346,000 in restitution to AAON, Inc., where he had worked unloading trucks and verifying inventory. The charge to which he pleaded guilty alleged that he caused the company to purchase items that it didn't need and then would sell them on the online auction website His petition to plead guilty said he had received mental health treatment for kleptomania.
  • Elizabeth A. Stanley, 54, was sentenced in October 2011 to one year and three months in prison and was ordered to pay $118,956.87 in restitution after pleading guilty to willfully misapplying funds while she worked at First National Bank & Trust Co. of Miami, Okla. Though not charged as an embezzlement case, Stanley admitted in her plea agreement that she stole money by converting checks to her own use and taking money that she was supposed to be putting in automated teller machines.
  • Thomas Clark Rondot, 67, was sentenced in July 2011 to two years in prison on a tax-evasion conviction connected to his embezzlement from the Crosby Group, Inc. for whom he used to work as chief financial officer. He conceded in his plea agreement that he owed more than $1.3 million in restitution to the Crosby Group and an insurance company for conduct "that is not the offense of conviction." U.S. District Judge Claire Eagan indicated during Rondot's sentencing hearing that Rondot had embezzled for more than three years and did not pay taxes on the stolen money.

Civil Suit Suggests $130K Embezzlement From Massachusetts Municipal Police Union Benefits Fund

From the Boston Globe on 3/4/14:

A recently retired Hull police officer has sued the town’s police chief and several other high-ranking officers, saying they embezzled union funds and charitable contributions for meals in expensive restaurants and drink tabs at bars and adult entertainment clubs.

In the complaint, Richard McKenna, who retired in December after 28 years on the force, said he filed the suit after he did not receive supplemental retirement benefits owed to him by the union. The union president, Scott Saunders, later told him that $130,000 was missing from the fund, which was virtually empty, and there were no financial records, according to the suit.

The civil suit, filed on behalf of all union members to recover the allegedly lost funds, includes testimony from Saunders saying he contacted the state attorney general’s office in December about the missing money. The attorney general’s office would not confirm or deny that it is investigating the matter.

Police Chief Richard Billings said Monday that he had not been a union member since 2004, when he became chief, and has had nothing to do with the union’s finances since then. He was aware that Saunders had reported the missing money to authorities and said he was eager to learn the outcome of any investigation.

Read the whole story here.

Former Municipal Finance Director Sentenced For Embezzling $400+K From North Carolina Town

From the Lincoln Times-News:

The City of Cherryville’s former finance director will spend two years in federal prison after pleading guilty to embezzling more than $400,000 in city funds over a six-year period, according to the United States Attorney’s Office in the Western district of North Carolina.
A federal judge sentenced 59-year-old Bonny Verley Alexander on Friday, ordering her to 24 months behind bars followed by an equal time period of supervised release.
Alexander, who pleaded guilty in 2013 to five counts of program embezzlement for misappropriating city funds, federal authorities said, served as finance director for the City of Cherryville from 2005 through 2011, when she retired.
Over the six-year period, she stole city funds to “pay for personal expenses” including shopping and travel expenditures, a U.S. Attorney’s Office press release said.
Not only did she take an amount each week worth more than 300 percent of her actual salary but she also used American Express credit cards to pay for her private spending ventures.
The amount totaled just under $310,000, according to federal authorities.
Read the whole story here.

Missouri Man Pleads Guilty To Embezzling Nearly $5 Million From Leasing Concern; Was Company Controller; Gambling Blamed

From Kansas City infoZine on 3/1/14:

A Neosho, Missouri man pleaded guilty in federal court to stealing more than $4.9 million from his employer.
Springfield, MO - infoZine - David VanWinkle, 60, of Neosho, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to wire fraud, money laundering, and failure to pay taxes.

VanWinkle was the comptroller for Frontier Leasing Incorporated (FLI) in Joplin, Missouri. By pleading guilty today, VanWinkle admitted that he stole $4,911,621 from FLI between June 2008 and December 2013, which he spent on personal expenses and gambling.

Based on a report from a financial institution, federal agents began investigating unusual deposits VanWinkle made into his business accounts for two businesses, VanWinkle Accounting and VanWinkle Farms.

VanWinkle, acting as the comptroller for FLI, received payments from FLI’s customers in the form of checks. VanWinkle deposited some of those checks into FLI’s legitimate business accounts but deposited other checks into another checking account under the name of FLI that VanWinkle had opened at another bank. VanWinkle was the sole person on this secret account; no one else was aware that FLI had the account and VanWinkle was not authorized to open an account or deposit any of FLI’s customer payment checks into the account.

Read the story here.

Four Women Separately Banned From Involvement In Federally Insured Financial Institutions For Fraud & Embezzlement

From the Credit Union Times on 2/28/14:

The NCUA issued four orders on Friday prohibiting individuals from participating in the affairs of any federally insured financial institution. Violators were all banned for theft, with court-ordered restitution amounts ranging from less than $20,000 to more than $1 million.

Carol Ann Ferraro, former executive vice president of $107 million Chaffey Federal Credit Union in Upland, Calif., was sentenced to 30 months in prison, five years of supervised release and ordered to pay $1,052,790.56 in restitution for embezzlement.

Jeannette Abbott, a former employee of the $86.8 million Malheur Federal Credit Union in Ontario, Ore., pleaded guilty to theft, embezzlement or misapplication by a credit union officer, which carried a four-month prison sentence, three years of supervised release and restitution in the amount of $93,749.40.

Justine Martin, a former employee of the $633.6 million Leominster Credit Union in Leominster, Mass., “admitted to facts sufficient for a finding of guilt to the charge of larceny over $250,” said the NCUA. She must serve five years of supervised probation and pay $17,990 in restitution.

Nancy Ann Secoda, a former employee of $407 million Vons Employees Federal Credit Union in El Monte, Calif., was convicted for grand theft and willfully acquiring personal information. Secoda pleaded no contest and was ultimately sentenced to five years in prison and required to pay $712,253.58 in restitution.

Read the whole story here.

Sunday, March 2, 2014

City Clerk In Oklahoma Charged With Embezzling Over 7 Year Period; Manipulated Payroll

From Oklahoma 9 Mobile on 2/28/14:

The Rush Springs City Clerk has been charged with embezzlement.

John David Morrow was responsible for all of the city's finances for nearly a decade.

During that time, investigators claim he manipulated the payroll in an effort to increase his salary.
The allegations first surfaced following an audit of the City of Rush Spring in 2011.

According to court papers, Morrow did not withhold payroll taxes from his paychecks, did not withhold insurance premiums and issued himself extra paychecks.
Morrow allegedly embezzled from the city for seven years until he was caught.

The Grady County District Attorney's Task Force began investigating Morrow's activities, and records show Morrow admitted to investigators he took the money to pay for living expenses such as paying for his home and raising his children.

Read the story here.