Saturday, January 31, 2015

Missouri Woman Sentenced To 30 Months In Prison For Embezzling $576K

From KRCG13 on 1/29/2015:

A Columbia woman was sentenced to prison for a $576,000 mortgage fraud and embezzlement scheme during her employment at a title company.

50-year-old Terri Lynn Johnson was sentenced Wednesday to two years and six months in federal prison without parole. The court also ordered her to pay over $405,000 in restitution.

Johnson was hired for a clerical position with Guaranty Land Title Company in 2001 and eventually promoted to branch manager of the Fulton office. She remained in that position until her termination in 2008.

Johnson pleaded guilty to bank fraud and money laundering in July 2013. She admitted engaging in a $300,000 mortgage fraud scheme while employed as the Fulton branch manager. Johnson refinanced the mortgage on her home twice. As a result of the false information provided, two banks approved mortgage loans for $175,000 in 2007 and $125,000 in 2008.  The combination of those loans exceeded the appraised value of Johnson’s home, which was used to secure both loans.

Johnson also admitted she embezzled over $275,000 from Landchoice, parent company of Guaranty Land Title Company.  She also wrote checks to herself totaling nearly $60,000 and deposited them into her personal checking account. She also wrote checks to her personal business totaling approximately $12,500. Johnson utilized a debit card for the account to access nearly $185,000 from that account for her personal benefit.

The total personal benefit from this embezzlement scheme is estimated to be $276,173.

Virginia Man Sentenced To Prison For Embezzling $250K From State Alcoholic Beverage Control Agency

From NBC12 on 1/29/2015:

A former state employee could spend the next ten years in prison for stealing your tax money.
Sentencing for Steven Hammond is scheduled for Thursday afternoon.

Hammond pleaded guilty to federal embezzlement charges after prosecutors say he stole nearly $250,000 while employed with the Virginia Department of Alcoholic Beverage Control.

Hammond, 29, was the education coordinator for ABC, handling the Youth Alcohol Drug Abuse Prevention program, a project that works with Virginia teens to keep their schools and communities drug and alcohol free. Hammond admits to preparing false paperwork for the program which led ABC to issue checks to his friends.

Friday, January 30, 2015

New Mexico Man & Former Tribal Governor Pleads Guilty To Embezzling Nearly $3.6 Million From Agency

From KRWG-TV on 1/28/2015:

A former Governor of Santa Ana Pueblo and a real estate consultant pleaded guilty this morning to federal embezzlement and tax charges arising out of a scheme to embezzle approximately $3,575,000.00 from the Indian Pueblo Federal Development Corporation (IPFDC), an Indian tribal organization formed by the 19 Pueblos of New Mexico for the purpose of developing land that once had been the site of the Albuquerque Indian School.

Bruce Sanchez, 60, a member, resident and former Governor of Santa Ana Pueblo, N.M., entered a guilty plea to embezzlement from an Indian tribal organization and tax evasion charges.  His co-defendant Thomas Keesing, 61, of Pecos, N.M., pled guilty to aiding and abetting embezzlement from an Indian tribal organization and the willful failure to file a tax return.  The guilty pleas were announced by U.S. Attorney Damon P. Martinez, Special Agent in Charge Dawn Mertz of the Phoenix Field Office of IRS Criminal Investigation, and Matthew Elliot, Deputy Assistant Inspector General for Investigations for the Department of the Interior.

Sanchez and Keesing were indicted in Oct. 2012, and charged with a conspiracy offense and ten substantive embezzlement offenses arising out of the scheme to steal funds belonging to the IPFDC.  The 15-count indictment also charged Sanchez with three tax evasion counts alleging an aggregate federal tax loss of $655,276.00, and a misdemeanor count of willful failure to file a tax return.  In Aug. 2013, Keesing was charged by information with three misdemeanor counts of failure to file tax returns and those tax charges were consolidated into the case.  The information charged Keesing with failure to file federal tax returns for calendar years 2006, 2007 and 2008, even though he received gross income in the aggregate amount of $2,771,250.00 during those three years.

According to the indictment, between 2003 and 2009, Sanchez and Keesing conspired to embezzle approximately $3,575,000.00 from the IPFDC.  During that time, Sanchez was the president and chief executive officer of the IPFDC.  Keesing, a commercial real estate developer and the owner of New Mexico Real Estate, Inc. (NMREI), worked as a consultant for IPFDC in 2002 and 2003. 

Sanchez and Keesing engaged in a scheme to unlawfully profit from the development of the Albuquerque Indian School property by having Keesing submit false and fraudulently inflated invoices for payment from NMREI to the IPFDC.  Sanchez approved the invoices even though the payments were vastly in excess of the value of any services provided by Keesing and NMREI.  Keesing then shared the proceeds of the fraudulently obtained IPFDC payments with Sanchez. 

Between 2003 and 2008 and as a result of this illegal scheme, Keesing and NMREI received $3,775,000.00 in payments from the IPFDC, including $3,575,000.00 that was fraudulently obtained.  During that same period, Sanchez and Tsachu, LLC, his solely-owned consulting company, received approximately $1,722,823.04 from Keesing and NMREI.

This morning, Sanchez entered guilty pleas to Counts 3 and 13 of the indictment charging him with embezzlement from an Indian tribal organization and tax evasion, respectively.  Sanchez’s plea agreement details the embezzlement scheme through which Sanchez and Keesing defrauded the IPFDC of $3,575,000.00.  Sanchez brought Keesing onto the IPFDC development team in 2002 and Keesing performed services for the IPFDC in 2002 and 2003.  Thereafter, Sanchez and Keesing entered into a brokerage and development agreement that was never presented to the IPFDC board for approval, and used the agreement as the vehicle to perpetuate their embezzlement scheme.  

Between Jan. 2005 and Nov. 2008, Keesing and NMREI submitted more than 100 invoices for professional services purportedly provided in connection with the development of the Albuquerque Indian School site.  Sanchez arranged for the IPFDC to pay the invoices, and in return, Sanchez and Tsachu, LLC, received more than 100 checks in the aggregate amount of $1,652,823.04 from Keesing and NMREI.  Although this illegally obtained money was taxable income, Sanchez did not report the income to the IRS.

Keesing pled guilty to Count 3 of the indictment charging him with aiding and abetting embezzlement from an Indian tribal organization, and Count 1 of the misdemeanor information charging him with the willful failure to file an income tax return.  Keesing’s plea agreement sets forth a detailed description of his role in the embezzlement scheme that defrauded the IPFDC of $3,575,000.00.  According to his plea agreement, Keesing shared these illegally obtained proceeds with Sanchez with Sanchez taking $1,652,823.00, and Keesing retaining the balance.  Keesing acknowledged that Sanchez provided nothing of value in return for this money and used Keesing as a conduit to receive IPFDC funds to which he was not entitled.  Keesing participated in the scheme to obtain additional compensation for work he previously performed on behalf of the IPFDC and for which he felt he was not adequately compensated.  Although the proceeds Keesing obtained from the IPFDC were taxable income, he failed to file federal tax returns reporting the income.

Sanchez and Keesing remain on conditions of release and under pretrial supervision pending their sentencing hearings, which have yet to be scheduled.  At sentencing, Sanchez faces a statutory maximum penalty of five years in prison on each of the two counts of conviction.  Keesing faces a statutory maximum of five years in prison on the embezzlement count and up to one year in prison on the tax count.  The plea agreements also require that Sanchez and Keesing pay full restitution to the IPFDC for the losses it sustained as a result of their criminal conduct.   

In announcing the guilty pleas, U.S. Attorney Damon P. Martinez said, “The IPFDC was established to develop real estate for the benefit of the 19 Pueblos of New Mexico and their people.  Bruce Sanchez was entrusted to spearhead that development.  Instead, Sanchez betrayed the people he was duty-bound to serve.”

“Mr. Sanchez and Mr. Keesing used their positions of power to line their own pockets at the expense of the members of New Mexico’s Pueblos. By pleading guilty today and accepting responsibility, the defendants have taken a positive first step in making amends for the harm they have caused,” stated IRS Criminal Investigation Special Agent in Charge Dawn Mertz.


Read the whole story here.

North Carolina Woman Accused Of Embezzling Nearly $200K From Mill

From WHKY-TV on 1/28/2015:

45-year-old Crystal Franklin Burgess Wilson of Worthington Place in Lincolnton has been arrested by Lincoln Co. Sheriff’s Officers on a charge of felony embezzlement greater than $100,000.

She’s accused of taking more than $196,000 from a Denver business over a seven-year period. On January 20, an official with S&L Sawmill on N.C. Highway16 in Denver filed a report regarding funds that were stolen from the company. Detectives were provided with copies of 179 checks written on the S&L Sawmill account to the suspect.

The checks written to Wilson, her bank and other accounts, totaled $196, 885.86. The checks were written between 2008 and 2014. She was terminated from employment in November of 2014. Detective Richard Calhoun interviewed Wilson, who admitted to taking the funds.

She was taken before a Lincoln County Magistrate yesterday (January 27) and released on a $25,000 unsecured bond. Wilson was scheduled to make a first appearance in District Court today.

California Family - Husband, Wife, Son & Daughter - Accused Of Embezzling $900K From Union

From the San Bernardino Sun on 1/28/2015:

A Loma Linda family was arrested Wednesday on suspicion of embezzling $900,000 from a union’s wealth and welfare trust over eight years, according to the United States Attorney’s Office.

John S. Romero, 68, the former president of United Industrial and Service Workers of America Local 101; his wife, Evelyn Romero, 66, who succeeded her husband as president of USIWA until June 2014; their son, John J. Romero, 50, the former secretary and treasurer of USIWA; and their daughter, Danae Romero, 37, who was a union officer reportedly took the money by making monthly payments from the union account into fraudulent accounts, according to a 40-count indictment returned by a federal grand jury last week.
In one instance, monthly payments were being made for office space in Nevada, which allegedly housed offices for the union, according to Assistant United States Attorney Jay Robinson. That was not the case. The payments were being made to a Nevada-based company created by John S. Romero and his wife and daughter.

The family also allegedly made payroll payments from the union’s health and wellness trust to a defunct union, United Service Workers of America.

The family members reportedly knowingly filing false annual reports with the U.S. Department of Labor that failed to disclose more than $100,000 in UISWA revenues and disbursements, willfully misusing the assets from both the UISWA and UISWA Health Plan, and knowingly and willfully permitting another Romero-family member who had previously been convicted of a felony narcotics violation to serve as an officer and employee of the UISWA, according to the indictment.
About $110,000 of the money reportedly taken from the trust was used to pay for a civil lawsuit that involved the father and son, said Robinson. That case had no connection to the embezzlement investigation.

In early 2013, investigators received an anonymous call regarding some inconsistencies with the way the trust money was being handled, officials said.

The federal grand jury returned the indictment last week and all four were arrested Wednesday morning.

Mother and daughter were arrested in the Loma Linda home they shared and John S. Romero was taken into custody at his Colton home. The couple’s son was not arrested at his Loma Linda home.


Read the whole story here.

Michigan Woman Pleads Guilty To Embezzling $120K From Garage Door Company

From WWMT NewsChannel3 on 1/28/2015:

A Kalamazoo woman accused of embezzling more than $100,000 from a Portage business has taken a plea deal.

This week, Michelle McCarthy pleaded guilty to one count of embezzlement between $50,000 and $100,000, and one count of embezzlement of $1,000 to $2,000.

She's accused of stealing nearly $120,000 from Fawley Overhead Door Incorporated.
Kalamazoo County prosecutors say McCarthy worked for the garage door company as an office manager from June of 2012 to June of last year.

She's accused of writing about 80 checks to herself.

McCarthy is scheduled to be sentenced in April.

California Woman Suspected Of Embezzling $360K Worth Of Equipment From Hospital

From the Redlands Daily Facts on 1/28/2015:

A Redlands woman was released from jail on bail Wednesday after being arrested on suspicion of stealing about $360,000 worth of iPads and laptops from Loma Linda University Medical Center, according to authorities.

Tammy Wren Violet Veach, 45, was employed by the hospital when she took the electronics, according to the San Bernardino County Sheriff’s Department.

Detectives served a search warrant at Veach’s home Tuesday, arrested her at her east side residence and booked her on suspicion of embezzlement and grand theft, according to the Sheriff’s Department and booking records.
She posted bail about 11:22 a.m. Wednesday, 25 hours after her arrest, according to booking records.
Veach has not been charged or given a court date.

Idaho Man Sent To Prison For Embezzling $146K From Dairy - Had Prior History Of Financial Frauds

From the Magic Valley News Times on 1/28/2015:

A judge made good on his word Monday and sent Scott Yore to prison....

Read the story here.

Note: Yore was originally charged in July 2014 per KMVT-TV:

Twin Falls, Idaho ( KMVT-TV / KSVT-TV ) A local man is being charged with 30 counts of felony grand theft.

According to court records, 49 year old Scott Yore forged 30 checks worth more than 146 thousand dollars to his name.

Yore was the Chief Financial Officer for J and C Customs, where he allegedly signed the checks under the name John Gomez.

Gomez owns J and C Customs and G and H Dairy.

Yore was fired in January of this year due to poor performance.

The current book keeper noticed inconsistencies which led to the discovery of the theft.

The forged checks date back to June of 2013.

California Online Wine Auction Merchant Sentenced For Embezzling $500K

From the Napa Valley Register on 1/27/2015:

The former owner of an online wine auction company was sentenced Tuesday to 18 months in jail in connection with the theft of more than $500,000 worth of wines stored in south Napa County.

Napa County Superior Court Judge Michael S. Williams also ordered Joshua Krummenoehl, 41, of Brooklyn, New York, to spend 22 months under Napa County probation’s supervision program.

Krummenoehl, who had been out on bail, was booked into the Napa County jail right after the hearing.

Krummenoehl was president of until April 2012, three years after he started the online and live auction business. From 2011 until 2012, authorities alleged he kept wine and profits entrusted to him in consignment, according to court records.

He was arrested in July and extradited from New York to Napa, where he was charged with multiple counts of grand theft involving a dozen alleged victims from as far away as New York City, Denver and South Carolina.

In November, he agreed to plead no contest to one count of embezzlement and admitted a special allegation. At sentencing, a no contest plea carries the same weight as a guilty plea.

“I’m deeply sorry,” Krummenoehl told the court Tuesday, as he sat next to his attorney, Doug Pharr.
Pharr told the judge his client should not spend more than one year in custody. Krummenoehl’s mistake had been to treat the clients who had consigned the wine as investors into the company. “All along in this process, he was trying to make this company work,” Pharr said.

But California Deputy Attorney General Johnette Jauron argued Krummenoehl should serve three years and four months, the maximum term under the plea agreement. Krummenoehl, the prosecutor told the court, had shown no remorse and has made no efforts to pay the money owed.

Pharr countered that the restitution order had not been issued yet. His client has been earning only $16 an hour and had no money to pay restitution, he said. “He’s going to pay for this for the rest of his life,” Pharr said of the money owed.

Krummenoehl filed for bankruptcy in May 2013, according to court records., also known as Bridgeview Enterprises LLC, had an office in San Francisco, according to court records. He used a warehouse on North Kelly Road in south Napa County, said Carl Chapman, supervising inspector for the Northern California Computer Crimes Task Force, a multi-county effort based at the Napa County Sheriff’s Office.

Chapman began investigating the case in May 2012 when a client reported never paid him more than $41,300 for sales and unsold wine. Other consignors said they were in the same situation.

The company’s operating expenses exceeded its profits from the beginning, Chapman wrote in a court filing. Former employees said Krummenoehl solely controlled all the money generated and made all the financial decisions, according to Chapman. By 2010, Krummenoehl used the profits from the wine on consignment to pay his own expenses, he alleged in the court document.

The victims included Robert Dale and Robbie Hardy, who lived in North Carolina and placed their wine in consignment because they needed the money. The couple now lives in Napa. Their wine was sold online at half value to only one bidder, they said.

“This was intentional,” Dale told the court.

Another victim, Robert Cunard, had consigned 86 cases of old valuable wines against his wife’s wishes to to pay for their son’s education. He estimated his losses at about $75,000, according to court records.

Harry Cooper, a Sonoma County resident, reported he lost $50,000 while he was unemployed, according to his statement filed in court. Krummenoehl does not realize “what he was doing to people’s lives,” Cooper said as he walked out of the courtroom Tuesday.

Dale and Hardy have sued Krummenoehl, the company, and another company officer, Jorge Parra. Napa County Superior Court Judge Elia Ortiz ruled in August 2013 that Dale and Hardy are owed $207,000.

Dale and Hardy said they have not seen any payments. They went further into debt in order to file the civil lawsuit, they said.

“We’re glad to see him serve time,” Dale said after the hearing.

Wednesday, January 28, 2015

Former State Senator In Mississippi Indicted For Allegedly Embezzling $484K From Credit Union

From WAPT Ch. 16 on 1/26/2015:

Former State Sen. Tommy Robertson, of Moss Point, has been indicted on five counts of embezzlement.

The former chairman of the Senate Finance Committee is accused of embezzling $484,092 of loan proceeds from Singing River Federal Credit Union.

State Auditor Stacy Pickering said Robertson was holding the loan proceeds in trust for the purpose of distributing the funds in accordance with the applicable loan statements.

Pickering said Robertson, 59, surrendered himself to the Jackson County Sheriff's Office Monday and was released on $50,000 bond.

Pickering said the embezzlement is alleged to have occurred in April of 2013 while Robertson was board attorney for the credit union.


Read the whole story here.

Illinois Woman Sentenced To 45 Months In Prison Form Embezzling $2+ Million From Bank Over 17 Year Period

From WAND Ch. 17 on 1/27/2015:

The former head teller at a bank in Lincoln was sentenced today for embezzling approximately $2 million from the bank over a 17-year period.  Nancy J. Huskins, 63, was sentenced to 45 months in federal prison and ordered to pay restitution to the bank in the amount of $2,042,782. Huskins was also ordered to pay a fine of $10,000 and to remain under supervised release for a period of five years upon her release.  Judge Sue Myerscough ordered that funds held in various bank accounts, including a retirement account, and personal checking and savings accounts, be immediately applied as a lump sum to the payment of restitution.

In July 2014, Huskins pled guilty to one count of bank embezzlement. Huskins admitted that during her employment as the head teller at the State Bank of Lincoln, from about January 1996 to November 2013, she embezzled the funds for her personal use. Huskins admitted that in her position as head teller, she had access to the bank's vault and was entrusted with significant access to portions of the vault that maintained large amounts of cash. Huskins admitted that she disguised the embezzlement by personally participating in audits of cash amounts and engaging in other fraudulent acts designed to further conceal her embezzlement.

Sunday, January 25, 2015

Texas Man Pleads Guilty To Embezzling $931K From Contracting Firm

From the St. Joseph News-Press on 1/23/2015:

A Texas man pleaded guilty in federal court to a mail fraud scheme in which he embezzled more than $930,000 from Herzog Contracting Corp. in St. Joseph.

Daniel Reif, 48, of Weatherford, Texas, pleaded guilty Thursday in U.S. District Court to one count of mail fraud and one count of filing a false income tax return.

Mr. Reif admitted that he engaged in a scheme to defraud Herzog from January 2006 through Aug. 26, 2011. The government’s evidence establishes the amount embezzled totaled at least $931,256.

Herzog, which constructs railroads, highways, bridges and airports, has a regional office in Irving, Texas. Mr. Reif began working for Herzog in the Irving office in 2005 as a manager who was responsible for procuring materials and services from vendors.

Mr. Reif founded his own company, Railway Signal Solutions, in February 2005.
He began ordering project materials and services from supply vendors through RSS, then resold those products and services to Herzog at inflated prices. The RSS invoices made it appear as though the materials and services were being provided directly by RSS, an ostensibly independent supply vendor.

Under the terms of the plea agreement, Mr. Reif will be sentenced to 36 to 38 months in federal prison without parole and must pay restitution in an amount to be determined by the court. He must forfeit to the government $105,000 seized from his TD Ameritrade account and a 2010 Tige boat and trailer.

Read the whole story here.

California Woman Sentenced To 21 Months In Prison For Embezzling $480K From Credit Union

From the Orange County Register on 1/23/15:

A Lakewood woman who pleaded guilty to a protracted embezzlement scheme that resulted in the failure of a credit union was sentenced Friday to 21 months in federal prison.

Wendy Wall, 50, was sentenced by United States District Judge James V. Selna in Santa Ana.

In addition to the prison term, Selna ordered a four-year term of supervised release, which would include 12 months of home confinement and ordered Wall to pay $480,273 in restitution, the FBI said in a statement.

Wall pleaded guilty to bank fraud on Sept. 2, for engaging in the embezzlement scheme while employed at the Pepsi Cola Federal Credit Union.

Beginning in 1993 and continuing to February 2014, Wall was the manager and sole employee at the Pepsi Cola Federal Credit Union, a small financial institution in Orange County that served local Pepsi Bottling Company employees, according to the FBI.

While employed there, Wall operated an embezzlement scheme over a period of more than a decade by using her position to create fictitious bank accounts, the FBI said.

Wall withdrew funds against those accounts by creating fictitious loans and by writing checks using the accounts. Wall then deposited the misappropriated funds into bank accounts belonging to Wall or her family members, the FBI said.

The scheme was discovered following an audit by the National Credit Union Association, whose personnel contacted the FBI to investigate. Analysis indicates that the embezzlement scheme led to the eventual failure of the Pepsi Cola Federal Credit Union; however, members were indemnified against losses under an agreement with the National Credit Union Administration, the FBI said.  

Read the whole story here.

Saturday, January 24, 2015

Elderly Michigan Bookkeeper Pleads No Contest To Embezzling $100K

From on 1/23/2015:

The 71-year-old former longtime bookkeeper of a small Muskegon metal-finishing company has pleaded no contest to embezzling more than $100,000 from her employer – an increased charge from what she originally faced.

Muriel Elizabeth Carlson entered the plea Tuesday, Jan. 20. Sentencing by Muskegon County 14th Circuit Judge Timothy G. Hicks was scheduled for Feb. 23.

The no-contest plea is the equivalent of a guilty plea but can't be used against her in case of a civil lawsuit.

Carlson, of Twin Lake, stands convicted of embezzling more than $100,000 over more than six years from Spec Abrasives and Finishing Inc., 543 W. Southern Ave. in Muskegon. According to the arrest warrant, the thefts occurred between October 2007 and early 2014.

The charge is a maximum 20-year felony, though the actual sentence will depend on state guidelines and will likely be lower than that.

Carlson had been charged with embezzlement of between $50,000 and $100,000, a maximum 15-year felony. But the charge was upped after prosecutors and the defense didn't come to an agreement on how much Carlson stole and consequently how much restitution she should pay. Prosecutors increased the charge after consulting with the victims.

"There's not been an agreement between our office and the defense as to the total amount," Chief Assistant Muskegon County Prosecutor Timothy M. Maat said. "However, our office based on all the evidence we've received is convinced it's $100,000 or more."

Carlson accepted that and pleaded no contest to the higher charge.

The total amount stolen remains in dispute. Maat said prosecutors believe the total is more than $150,000. The exact amount of restitution will be decided by the judge after a restitution hearing.

Carlson's attorney, Edward Wasiura, could not immediately be reached for comment Friday, Jan. 23.
Jim Perreault, co-owner of Spec Abrasives, says the total amount stolen may be
$182,000. He and his partner, Jerry Tanis, want to get as much of the embezzled money back as possible.

Carlson kept the firm's books and had control of its accounts since before the partners bought the firm in 2003, Perreault said.

He said the thefts, which amounted to thousands of dollars a month, hurt the company's business and the other employees. Spec Abrasives employs 10 people, he said. The lost profits would have been reinvested in the business, Perreault said.

Perreault said the partners trusted Carlson. Although he said their books were audited, accountants checked them monthly and bank officials looked at them, Carlson because of her position was able to regularly funnel company funds to her personal use.

"It's embarrassing, but we're not the criminals here, we're the victims," Perreault said. "So we shouldn't need to be embarrassed. She faced me every day and was stealing money every day.
"She was like my mother," he said. "I trusted her wholely and completely with everything. Do we need to be so cold that we can't trust anybody anymore?"

Perreault said the embezzlement came to light after the company hired an assistant bookkeeper to help out Carlson in hopes of lightening the burden on her due to her age.

After the thefts were discovered, the company fired Carlson and notified authorities. She was charged in May 2014.


Read the whole story here.

Massachusetts Woman Pleads Guilty To Embezzling $1.5+Million From Medical Practice

From the Daily Hampshire Gazette on 1/22/2015:

A Belchertown woman pleaded guilty Thursday in U.S. District Court in Springfield to embezzling more than $1.5 million from the Northampton medical practice where she formerly worked as an office manager.

Roxanne Tubolino, 56, pleaded guilty to wire fraud and six counts of tax evasion. Maximum sentences on all seven charges total 50 years in prison. Judge Mark G. Mastroianni scheduled sentencing for April 16.
According to a statement issued by U.S. Attorney Carmen M. Ortiz, Tubolino worked at Northampton Internal Medicine Associates from 2008 through Sept. 11, 2013. Tubolino embezzled $1,562,206 by writing checks from the medical practice’s corporate account to pay her personal credit cards issued by American Express, Bank of America, Chase and Barclays, according to the U.S. attorney’s office. She concealed the thefts by entering the checks into the medical practice’s financial records as business expenses, prosecutors reported.
Tubolino also filed tax returns for 2008 through 2013 in which she did not report any of the income she received from the embezzlement, according to the U.S. attorney’s office.
Read the whole story here.

Friday, January 23, 2015

Nebraska Woman Reaches Plea Agreement In $2.5 Million Embezzlement Conspiracy

From KETV Ch.7 on 1/22/2015:

A Fremont woman tied to an embezzlement scheme that netted nearly $2.5 million has been convicted on three misdemeanor counts.

The Fremont Tribune reports that 51-year-old Kathy Springer-Hesman pleaded no contest Thursday to receiving stolen property and two counts of attempted filing of false tax returns. Prosecutors had lowered some charges and dropped others in return for her pleas. Her sentencing is set for March 27.

Springer-Hesman and 43-year-old Joleen Cameron are accused of helping Cameron's father, Dennis Hesman, steal from his employer, Gavilon.

The 66-year-old Hesman died in August. He was accused of creating fake grain receipts at the grain elevator he ran.

A court document says Cameron has worked out a plea deal and is asking that her arraignment hearing be delayed until Feb. 11.

Thursday, January 22, 2015

Michigan Woman Charged With Embezzling $197K From Local Hotel

From the Petoskey News on 1/22/2015:

A Conway woman is facing up to 20 years in prison after she was recently charged with embezzling nearly $200,000 from a Petoskey-area hotel she managed for 17 years.

On Dec. 27, Emmet County Sheriff's deputies arrested Colleen "Koko" Gay Loar, 50, on a charge of embezzlement by agent or trustee, more than $100,000.

The charge is a felony punishable by up to 20 years in prison.

Loar is free from custody after posting a $10,000 surety bond on the day of her arrest.
According to an Emmet County Sheriff's office affidavit filed in the case, the alleged embezzlement took place over a nearly five year period from April of 2008 to Jan. 31, 2013.
According to the affidavit in February of 2013, the owners of the company that operates the Petoskey Comfort Inn, located at 1314 U.S. 31 North in Bear Creek Township, reported that they believed that Loar, the hotel's longtime manager, had been stealing money and using company funds to pay for her personal goods and services.
Police said their investigation showed that Loar allegedly misappropriated a total of $197,000.
According to the affidavit, Loar is accused of using company money to buy computers, a tankless water heater and two water treatment units for her home, automotive repairs for her car, a $500 purse, clothing at Boyne Highlands, phone bills, and to make more than $6,400 in donations to area charities and nonprofit groups.
She also is accused of writing 10 checks on the company's account to "cash" totaling $17,626 and allowing another person to stay at the hotel for a month and only charging him for one night's stay — a $5,770 value.
The owners also reported to police that a review of the company's books from 2010-2012 revealed more than $154,000 in missing cash receipts, according to the affidavit.


Read the whole story here.

Former Texas Banker Sentenced For Embezzling $779K

From the Cypress Creek Mirror on 1/21/2015:

Carlos Lavin Ibarra, 34, of Houston, has been sentenced to federal prison following his conviction on one count of bank fraud, announced U.S. Attorney Kenneth Magidson. Ibarra pleaded guilty July 9, 2014.

On Tuesday, U.S. District Judge Nancy Atlas, who accepted the guilty plea, stated that the idea that a banker takes money out of someone else’s account without authority must be sanctioned and handed Ibarra a sentence of 33 months in federal prison to be immediately followed by five years of supervised release. Defendant was not ordered to pay a fine. He was further ordered to pay $779,000 in restitution.

Ibarra worked at JP Morgan Chase Bank in Houston. He admitted that while employed there, he purchased or caused to be purchased $779,000 in cashier’s checks on accounts owned by a person from Nigeria. This person was deceased at the time of the defendant’s actions and Chase was not advised of his death. The defendant admitted he acted fraudulently and without authority.

The cashier’s checks were all made payable to “Ben Leasing.” Ibarra admitted he caused another individual to obtain a certificate of operation under the assumed name of Ben Leasing from the County Clerk of Harris County and open a bank account in that name. However, that person refused to accept the cashier’s checks and Ibarra then re-deposited the checks at Chase. He further caused eight more cashier’s checks to be purchased in various amounts, payable to different individuals with whom Ibarra had a relationship. Three of these checks were subsequently exchanged for identical Chase cashier’s checks. All of the Chase cashier’s checks were deposited into different bank accounts in Houston.


Read the whole story here.

Former Sheriff's Deputy In Illinois Indicted For Allegedly Embezzling $100K+

From on 1/21/2015:

A former McLean County sheriff's deputy was indicted Wednesday on felony theft charges alleging he stole more than $100,000 from the deputies' police union.

Jay Hobson, 36, of Bloomington faces two counts of theft over $100,000 in which he is accused of taking money from the union between Nov. 2, 2011, and July 28, 2014. He resigned Aug. 15, 2014, shortly after the money was reported missing.

Hobson was booked into the jail late Wednesday afternoon after he turned himself in. He was jailed in lieu of posting $10,025.

Sheriff Jon Sandage, who was elected in November, said Wednesday the charges against Hobson, who worked for the department for 12 years, are unfortunate but not a reflection on the department's 54 sworn officers.

"The majority of our officers realize that someone who does things that gives police a black eye has no business in police work. Every good police officer knows they are held to a higher standard," said Sandage.

In early August, officers with the McLean County Deputies Fraternal Order of Police No. 176 discovered an alleged embezzlement that wiped out its bank account, Deputy Jeremy Bradley said last month.

"We were depleted," said Bradley, union president since January 2014.

The money was intended for a variety of charity efforts, including holiday food baskets for families at The Baby Fold. Bradley said about $4,000 was donated by people in December after a story in The Pantagraph.


Read the whole story here.

3 Arrested In $280K Embezzlement at University of Arkansas Community College Bookstore

From Arkansas Online on 1/21/2015:

Police arrested two more women Wednesday in an ongoing embezzlement investigation from the University of Arkansas Community College at Hope bookstore.

Police started investigating the embezzlement in October after the Texas Book Company Bookstore, located on the university's campus, reported more than $280,000 in cash missing, according to a Hope Police Department news release.

Brandy Harvel, 26 of Hope, and Tammy Williams, 49 of Hope, have been charged with theft over $25,000 and were taken to the Hempstead County jail Wednesday, the release stated.

Officers arrested Heather Langston, 27 of Hope, on Friday, the first suspect arrested in the case, according to the news release.

Langston was taken to the Hempstead County jail and charged with theft over $25,000, police said.
Police are still investigating the case and expect more arrests, according to the release.

Wednesday, January 21, 2015

New York Woman Sentenced For Embezzling $466K

From the Schenectady Times-Union on 1/21/2015:

Carrie LaFond, a once-trusted accountant who stole $466,000 from her employers, was sentenced Wednesday to 2 1/3 to 7 1/2 years in prison.

LaFond, 41, previously pled guilty to grand larceny and tax fraud, both felonies, for embezzling from John D. Marcella and Son Appliances & Home Entertainment.

Visiting County Judge Polly Hoye sentenced LaFond to the concurrent terms under a plea agreement reached in November. LaFond was taken into custody immediately after her sentencing.

She stole from Marcella's business account from April 6, 2011, to March 24, 2014, according to a criminal complaint.

She was caught when credit card companies inquired "as to whether a certain account should be being paid from their business account," Schenectady County Assistant District Attorney Jennifer Assini said.

LaFond, the wife of Paul LaFond, Schenectady's water and sewer department director, must repay the entire amount she stole, the prosecutor previously told reporters. She still owes $339,000 in restitution, prosecutors said Wednesday.

Connecticut Man Charged With Embezzling $808K From Municipality

From WTNH Ch.8 on 1/20/2015:

A former finance director for the town of Plymouth was charged Tuesday with embezzling more than $800,000.

David Bertnagel, 41, was arrested Tuesday morning and presented in U.S. District Court in Hartford on a charge of theft from a local government receiving federal funds. That carries a possible 10-year prison sentence.

According to the criminal complaint from the U.S. attorney’s office, Bertnagel issued 207 checks to himself from October 2011 to October 2014 totaling $808,030.

Bertnagel, who worked for the finance department for more than six years, is accused of using more than $100,000 of the stolen money to buy coins, stamps, highly sought-after Hummel porcelain figurines and other collectibles. Prosecutors said he also used embezzled funds for home improvement projects, mortgage payments and credit card bills.

Bertnagel, who lost his job in November, was released after posting a $250,000 bond. A phone call to his Thomaston home seeking comment Tuesday went unanswered.

According to the complaint, Bertnagel told the FBI that he had been authorized by former Mayor Vincent Festa and former mayoral assistant Theodore Scheidel to make early draws on his pension.

In November, his lawyers provided a photo copy of the paperwork to the town, which turned it over to the FBI.

There is no record of such a contract in City Hall, according to the complaint.

Festa told authorities he didn’t recall any such agreement and doesn’t believe it occurred. Scheidel is deceased.

According to the complaint, the FBI discovered an electronic copy of Festa’s signature on Bertnagel’s computer which appears to be “very similar” to the one on the purported contract.


Read the whole story here.

Florida Woman Charged With Embezzling $190K From Bank

From WJAX-TV 47 on 1/20/2015:

According to documents Action News obtained from U.S. District Court, Margaret Miller, also known as Peggy, had intent to defraud EverBank. The documents say that from November 2013 to May 2, 2014, Miller willfully embezzled approximately $190,000 in cash from a vault.

Read the whole story here.

Tuesday, January 20, 2015

Former CFO of Ohio-Based Fast Food Concern Accused of Embezzling $3.3 Million

From ABC Ch. 6 on 1/20/2015:

A Midwest burger chain has accused one of its former workers of having sticky fingers after investigators discovered $3.3 million missing from the company's books.

Frisch's Restaurants Inc. claims Michael Hudson, a former assistant treasurer, forged payroll documents and created fake accounting entries to divert funds into his personal accounts over several years.

Frisch's is seeking restitution and has filed a lawsuit against Hudson, WCPO reported.

"While we were saddened to learn of these unlawful and fraudulent acts carried out against the Company by a trusted and long-time employee, we took swift action as soon as we discovered the fraud," said Craig Maier, Frisch's Chief Executive Officer, in a regulatory filing to investors. "As a precautionary measure, the Company is implementing an additional layer of checks and balances in our accounting systems to protect against this type of fraudulent behavior in the future."

Frisch’s told investors that the fraud is not likely to force a restatement of net income for the fiscal years 2012 through 2015.  It did not explain how the fraud was discovered.

"Our employees and shareholders can take pride in the Company's 67-year history of success and its well-deserved reputation for integrity and responsibility," Mr. Maier added. "We can assure them that we will devote as much of our human and financial resources as are necessary to conclude this episode promptly and efficiently.”


Read the whole story here.

Update (1/22/2015): Frisch's stock price dropped about 1% in the wake of the embezzlement scandal.

Update (3/17/2015): The magnitude of the Frisch embezzlement scheme is now estimated to be at least $3.9 million.  Read an update of the story here.

Northern Michigan County Experiencing Rash of Embezzlement Cases

From on 1/20/2015:

The Ontonagon County Prosecutor's Office is currently handing three separate embezzlement cases.

The first is against Amy Truscott of Ontonagon. The embezzlement allegedly happened while Truscott was a partner with Roger's Insurance. She allegedly took premiums in early 2012. She has been arraigned for embezzlement of $100,000 or more. Truscott will be back in court for a preliminary hearing on February 2.

The second case is against Noah Arble of Ontonagon. Arble is charged with embezzlement as an agent or trustee of $20,000 or more but less than $50,000. This allegedly happened between September 2012 and February 2014, while he was treasurer of the local Habitat for Humanity. Arble's preliminary hearing is also set for February 2.

A third suspect is still awaiting arraignment. This person allegedly embezzled funds from Aspirus Physical Therapy Center. Their name and further details will be released after formal arraignment of charges. That is expected to be done on January 26.

Monday, January 19, 2015

Washington State Man Sentened For Embezzling Nearly $500K From US Foodservice Corp.

From the Bonney Lake Courier-Herald on 1/17/15:

The former Vice President of Finance for the NW Division of US Foodservice was sentenced today in U.S. District Court in Tacoma to 30 months in prison, three years of supervised release and $496,845 in restitution, announced Acting United States Attorney Annette L. Hayes.

JASON A. GREEN, 37, of Puyallup, Washington, conspired with his friend, Jimmie Dillingham, to steal from GREEN’s employer, US Foodservice.  GREEN pleaded guilty to mail fraud, resulting in a loss of nearly half a million dollars to US Foodservice, in November 2013.

In November 2014 Dillingham pleaded guilty to mail fraud and will be sentenced later this year.  At the sentencing hearing U.S. District Judge Ronald B. Leighton told GREEN, “This offense is serious, it tears at the fabric of society . . . [it is the type of offense that] has a corrosive effect on people who didn’t have your opportunity.  You were blessed.  I can’t see the motivation.”

According to records in the case, beginning in July 2009 and continuing until late 2010, GREEN and Dillingham made up phony invoices indicating that Dillingham’s company had done work for US Foodservice.  GREEN abused his access to payment systems at the company to approve expenditures for work that was never done.  GREEN changed computer codes in the accounting records to conceal the fraud.
In one part of the scheme, the men invented a security company and submitted phony bills for work it allegedly did at a Clark County warehouse.  GREEN used his access to US Foodservice accounts to cancel the contract with a legitimate company and instead steered the business to Dillingham’s company.  The warehouse property was later sold.  After the men submitted the invoices for payment, Dillingham would deposit the checks and share the funds with GREEN.  Both men gambled significant amounts of the embezzled money at area casinos.
In December 2010, the company tried to untangle shortfalls in various accounts and GREEN quit his job when confronted about fraudulent entries in the books.  The company notified law enforcement which began the financial investigation.
Read the whole story here.

Huge Embezzlement Alleged From Hospital Construction In Canada

From the Toronto Sun on 1/17/15:

The former head of Canada's spy oversight body will be extradited from Panama according to QMI's sister TV station TVA.

Arthur Porter, the former head of the Security and Intelligence Review Committee, was arrested by Panamanian police in May 2013 at the request of Canadian authorities and has been imprisoned there ever since. Along with his partner Yanai Elbaz he is accused of embezzling $22.5 million from the construction of a hospital in Montreal during his time as head of the McGill University Health Centre.

The Montreal police's anti-corruption unit would not confirm the report.

It's unknown when Porter may be sent back to Canada."‹

Sunday, January 18, 2015

Virginia/Tennessee Mountain Empire Region Has Seen a Number of Embezzlement Cases Involving Women in Recent Years

From the Bristol Herald Courier on 1/17/15:

The news that prominent local businesswoman and charity executive Anita Foster-Machado was arrested last year on embezzlement charges caught many Bristol residents off guard.

But she is one of a number of women in the Mountain Empire who’ve been charged, and many convicted, in recent years of embezzlement, a crime that is most often committed by women in their 40s with no criminal history, according to a recent study by Boston consulting firm Marquet International.

-Machado, who is charged with six counts of felony embezzlement and is scheduled to return to Bristol Virginia General District Court Thursday for a hearing, was director of the Bristol Library Foundation.
After her arrest, Bristol Virginia Police Detective Robin McCoy said Foster-Machado, who had direct access to the foundation’s finances, made several unusual purchases, including clothing, purses and tanning visits, totaling more than $20,000 on the organization’s credit cards.
About 57 percent of embezzlers are women, Marquet said in its annual embezzlement study released last month.
Other studies have shown that women account for two out of three embezzlers. In a search of the Bristol Herald Courier’s archives, a vast majority of articles about people accused or convicted of embezzling were women.
Embezzlement is one of two crimes committed more often by women than men, the Marquee study revealed. The other crime is prostitution.
Although more women commit embezzlement than men, the men that do embezzle steal about two-and-a-half times more than women, the study found.
Many of the region’s high profile embezzlement cases involved women accused of making small purchases here and there, which added up to thousands of dollars over time.


Read the whole story here.

Get the Marquet Report on Embezzlement here.

Friday, January 16, 2015

Wyoming Man Sentenced For Embezzling More Than $1 Million From Energy Company

From the Sheridan Press on 1/16/15:

Judge William Edelman of 4th Judicial District Court heard testimony from investigators, victims and character witnesses Thursday before sentencing Ronald Barnes for felony fraud and larceny. Barnes, 55, had been charged with five counts of felony fraud and two counts of felony larceny in a case in which he embezzled more than $1 million in royalties from local company Summit Gas Resources between 2004 and 2012. Barnes received six to 10 years in prison for one count of obtaining property under false pretenses. Edelman sentenced Barnes to eight to 10 years in prison for each of the other six counts against him — another four counts of obtaining property under false pretenses and two counts of larceny — but those sentences were suspended, and Barnes was given eight to 10 years of supervised probation instead, set to run consecutively to his prison sentence. In addition to about $2,500 in court costs and fees, Barnes must pay restitution of the $1 million stolen from Summit Gas Resources, Inc., during the nine years that he was employed with the company. Barnes had originally pled not guilty to all charges but then changed his plea several months ago to guilty. Fake companies used Summit was operating as Pinnacle Gas Resources, Inc., when it hired Barnes in January 2004. He became the chief financial officer in April 2004 and was also named senior vice president. The company was preparing to go public, and Barnes’ duties involved setting up an accounting department in preparation for that move. Investigators found, though, that within 90 days of being hired, Barnes began stealing from the company using both his position and the accounting software with which he had trained. He set up fake companies or, in some cases, used companies that already had accounts in the software, and submitted false evidence that Summit owed these companies royalty money. He presented this evidence to Summit CEO Pete Schoonmaker, who signed checks believing he was making payments his company owed. Forrest Williams, from the Wyoming Division of Criminal Investigation, said the checks would be addressed to fake addresses, but Barnes would intercept them before they were sent out and deposit them in a bank in Montana. Barnes and his now ex-wife Jayne owned a company called Bellcamp, and royalty checks stolen from Summit were deposited into that account. Barnes said he hid the money from his wife and never claimed it on his taxes. State’s attorney Christopher LaRosa told the court that Barnes adjusted his patterns of stealing to account for problems that arose over the course of his time with Summit. In 2011, when the bank in Montana would no longer take checks that were not made out to Bellcamp, Barnes created a limited liability corporation called BK Energy, LLC, and set up a bank account and post office box in Denver. He, again, produced evidence that Summit owed this company royalties money and that he had negotiated payments. Despite a fiduciary contract with Summit, he never revealed that he was the sole proprietor and member of BK Energy in any of the five reports he filed with the U.S. Securities and Exchange Commission. LaRosa also told the court that Barnes did not stop stealing money from Summit when gas prices dropped and the company began to struggle in 2009. “The company was buffeted by forces beyond control,” LaRosa said. “There was less money to steal, but Mr. Barnes did not cease.” Summit CEO asks for restitution Barnes’ attorney, John Robinson, told the court that, while what Barnes was doing was wrong, the money stolen came from suspense accounts used for royalties and not accounts used for the operation of the company, suggesting that Barnes’ activities had not resulted in harm to the company. He asked Williams, of the Wyoming Division of Criminal Investigation, if the falling gas prices and not Barnes had done more harm to the company. Williams said it was apparent to investigators that Barnes spent more time trying to get away with his crime than working to offset problems due to those falling gas prices, which, in turn, caused harm to Summit. Schoonmaker gave a victim’s impact statement, telling the court how proud he had been to be CEO of the only NASDAQ listed company in Sheridan, but how Barnes’ actions had caused Summit to lose the support of investors. Schoonmaker called Barnes the “Bernie Madoff of Sheridan” and said Summit had to lay off half of its employees because Barnes failed to do his job properly. Summit is no longer a publicly traded company. “I want pay back,” Schoonmaker said. “But it is equally important that (Barnes) is made an example of.” Schoonmaker asked the court to sentence Barnes to at least eight to 10 years in prison.

Read the whole story here.

Virginia Woman Pleads Guilty In $500K Bank Fraud Case

From NBC29 on 1/16/15:

A Staunton, Virginia woman, who worked as a financial advisor for a Staunton-based branch of a national bank chain, pled guilty today in the United States District Court for the Western District of Virginia in Lynchburg to wire fraud charges.

Kirsten Flynn Hawkins, 45, of Staunton, Va., waived her right to be indicted and pled guilty to a three count Information charging her with three separate counts of wire fraud. Hawkins will be sentenced on May 5, 2014 and faces a maximum possible penalty of up to 30 years in prison and/or a fine of up to $1,000,000 for each of the three charges for which she was convicted. In addition, Hawkins' plea agreement calls for restitution to be made to her victims in an amount of approximately $500,000.

“Through a series of lies and deceitful measures, Ms. Hawkins betrayed the trust of those who gave her control of their finances,” Acting United States Attorney Anthony P. Giorno said today. “I only hope the restitution to be ordered by the court in this matter can restore to the victim the money which was stolen.”

According to evidence presented at today's guilty plea hearing by Assistant United States Attorney Daniel Bubar, Hawkins worked as a financial advisor for “Bank One.” During that time, between August 2011 and August 2014, the defendant devised a scheme to defraud and obtain money though false representations and promises.

Evidence showed that it was the purpose of the scheme for Hawkins to take control of “Victim One's” various bank and investment accounts, which were located in “Bank One.” At various times between 2011 and 2014 and on the three separate occasions charged, Hawkins caused money to be transferred from the accounts of Victim One to her personal banking accounts. The funds were used to pay various living expenses, utilities, rent, travel, jewelry, clothing, eating out and to provide other economic benefit for herself and her family.


Missouri Woman Sentenced For Embezzling $192K From Church Over 6 Years

From the Kirksville Daily Express on 1/15/15:
A Brookfield woman has received 21 months in prison for embezzling funds from a local church.   
Cynthia Head, 51, of Brookfield, was sentenced to 21 months in prison and ordered to pay $192,000 in restitution for embezzling funds from the Brookfield Church of Nazarene.  
Head was found guilty of writing unauthorized checks to herself, making unauthorized withdrawals from the church’s bank account and purchasing items like computers, cameras and vacuum cleaners with church checks, according to a press release from the U.S. Attorney’s Office in the Eastern District of Missouri. 
The fraud scheme began in September of 2007 and lasted until October of 2013. Head also served as the church’s treasure during the time and netted approximately $192,000 from the scheme, according to the release.  ....
Read the whole story here.

California Woman To Be Sentenced For $348K Embezzlement From Hardware Store Over 6 Years

From the Press-Democrat on 1/15/15:

A Santa Rosa woman will be sentenced to up to five years in prison after pleading no contest to embezzling $348,000 from a small Sonoma County hardware store chain, lawyers said Thursday.

Glynis Lewis, 45, was charged with stealing the money from Garrett Hardware when she worked as office manager from 2006 to 2012.

She was believed to have taken the money from daily cash bank deposits, prosecutor Amy Ariyoshi said.
Lewis acknowledged the theft in an apology letter she wrote to the store owners when she resigned in October 2013.

She initially was charged with five criminal counts, including money laundering and receiving stolen property.

But she pleaded no contest Monday to grand theft-embezzlement with a sentencing enhancement for the large amount. Her lawyers said the exact amount of the theft is in dispute.

“She pleaded to the charge for which she is responsible, and she’s going to be sentenced,” her attorney Roy Miller said.

The other charges will be dropped at her March 11 sentencing hearing before Judge Robert LaForge.
At a minimum, Lewis faces a year in county jail and a period of probation, Miller said.

Under state sentencing laws, she will be eligible for release after serving half of her time.
Read the whole story here.

Update 3/11/2015:  Lewis was sentenced to 40 months in prison.


Minnesota Woman Charged With Embezzling $1.3 Million; Blames Shopping Addiction & Bills For Sick Dog

From the Minneapolis Star Tribune on 1/16/15:

Vice president of a Golden Valley property management company confessed to stealing $1.3 million in one of the largest embezzlement cases ever seen in Hennepin County.

A pooch with cancer started Stephanie Langten Castillo down the path to involvement in the largest embezzlement case ever prosecuted by the Hennepin County attorney’s office, authorities said Thursday.
When approached by police in October, Castillo, vice president of a Golden Valley property management company, confessed to stealing $1.3 million, said County Attorney Mike Freeman. Half of the money fed a shopping addiction and the rest funded her husband’s business in Mexico, he said.
Freeman, who has served as county attorney for a total of 17 years, said Thursday that he was amazed that Castillo could systematically take that much money over five years. Because of the length of time and the dollar amount taken, his office will ask for a sentence significantly longer than that recommended in state guidelines, he said.
Castillo, 42, of Eden Prairie, is charged with eight counts of felony theft by swindle. She turned herself in to police Wednesday and posted $300,000 bail, which her attorney, Paul Dworak, called excessive. Arguing before Judge Gary Larson that Castillo’s travel should not be restricted, Dworak said she has two young children and is six months pregnant.
Castillo declined to comment through her attorney.
The dollar amount in her case tops that in another prominent embezzlement case, that of Joel Pourier, executive director of the Heart of the Earth charter school in Minneapolis, who in 2010 received a 10-year sentence for embezzling more than $1 million.
Castillo is accused of embezzling money from four companies, starting in 2009, while working for Balderson Management. Her biography on the company’s website said that “Stephanie strives for success and client satisfaction, by determining clients’ needs, wants, motivations, and financial goals” and that the company has “state-of-the-art financial management.”
Cynthia Balderson, the company’s president and Castillo’s mother, declined to comment Thursday. Balderson runs the daily operations of commercial properties, and Castillo provided property management and leasing services.
Castillo had access to clients’ funds and drafted fake invoices for vendor services and applied some of the payments to Balderson’s records, the charges say.
The final step was creating hundreds of fraudulent checks and forging her mother’s signature. Castillo made most of the checks payable to herself, but also used her clients’ businesses’ checks to pay personal bills, the charges say.
In October, Richard Martens, co-owner of commercial properties managed by Balderson, discovered the theft after realizing his “business projections were coming up very short.” After auditing his financial records, he noticed that several check amounts didn’t make sense. He then concluded that check signatures were forged and notified police.
Castillo told investigators she was unaware of any problems until she was advised that Martens knew about the many checks made out to her, the charges said. She then took full responsibility for her crimes and said the thefts started when she was desperate for money to help treat her ailing dog.
She wrote some checks as small as $77.46 to pay utility and insurance bills and others as large as $5,112 for snow removal, the charges say. An independent audit of Balderson’s financial records determined she wrote 404 checks totaling $1,306,709.23 between January 2009 and September 2014, the charges say.
The fraud began with a theft of about $50,000 every six months, the charges say. In the last six-month period, Castillo took nearly $300,000. The companies she stole from were Blakely Properties, Brookstone Vanman, Chanhassen Retail and Stewart Properties.
Read the whole story here.

$320K Embezzlement Investigated At College of DuPage In Illinois; Alleged Perp Had Prior History Of Fraud

From the College of DuPage on 1/15/15:

In December of 2013, College of DuPage officials uncovered a possible case of fraud by an employee of WDCB, the College’s radio station. The College immediately reported the matter to law enforcement officials, and the College has been cooperating fully during the investigation.

Contrary to statements made in a Jan. 15 article in the Chicago Tribune, COD has found no evidence that officials from Elmhurst College contacted College of DuPage regarding a 2011 arrest of a former radio station employee, John Valenta. The COD Police Department continues to investigate this claim.

COD Police Chief Joe Mullin said, “Our investigation has so far showed that we have no record of any communication from Elmhurst Campus Security regarding this former employee, nor have we recollection of anyone contacting us.”

COD President Robert L. Breuder said, “Predicated on our police department’s investigation, we have found no evidence that we received any communication on this matter from Elmhurst College. However, I have recommended to the COD Board of Trustees Chair that we hire an independent investigator to examine all facets of the communication process concerning this claim.”

“The Board will engage an outside entity for the limited purpose of reporting to the Board any findings stemming from the alleged communication of the 2011 arrest of a former employee. The College has and will continue to cooperate with the DuPage County State’s Attorney’s Office, and we will respect, and not interfere with, their investigation,” said COD Board Chair Erin Birt.


Read the story here.

Former County Treasurer In Montana Charged With Embezzling $200K

From KTVQ on 1/15/15:

Former Jefferson County Treasurer Patricia O'Neill has been charged with stealing $200,000 from the county.

The charge was filed in Jefferson County District Court this week.

Court documents state that over the period of six years O'Neill is accused of embezzling the funds from the county by "forcing balances" on the county books, receiving funds, recording them as income, and depositing the funds in her personal accounts.

She resigned from her post in April when she told the county clerk and recorder that she'd taken the money.

According to court documents, O'Neill told investigators that she planned to win the lottery and pay the county back.


Read the whole story here.

Ohio Woman Accused Of Embezzling $860K From Savings & Loan Customer

From WFMJ on 1/14/15:

EAST LIVERPOOL, Ohio - A retired employee of Home Savings and Loan is accused of stealing $860,000 over a six year period.

A federal grand jury has returned a one-count indictment charging Mary Jo Schmidbauer, age 67, of East Liverpool, Ohio, with bank fraud.

Prosecutors say that in 2007, when Schmidbauer was employed by Home Savings and Loan in East Liverpool, she obtained permission from a person identified only as “J.M.” to manage money that J.M. deposited into accounts maintained by the bank.

After retiring from her position, Schmidbauer obtained a power of attorney from J.M. to continue managing the accounts maintained by Home Savings and Loan, according to the indictment.

Schmidbauer also allegedly withdrew cash from J.M.'s accounts for Schmidbauer's own personal use and transferred money from J.M.'s accounts into Schmidbauer's accounts. Schmidbauer then withdrew that money for her own personal use, according to the indictment.

The indictment says that Schmidbauer obtained a total of approximately $860,000 from J.M.'s accounts between 2007 and 2013.


Read the whole story here.

Wednesday, January 14, 2015

Connecticut Woman Sentenced For Embezzling More Than $450K From Bank over 20+ Years

Fromm WTNH Ch. 8 on 1/13/15:

A Bridgeport woman has been sentenced to a year and a day in prison for stealing more than $450,000 from a bank.

Maria Rosa Esteves, 41, took the money by writing herself cashiers’ checks while working for People’s United Bank between 1993 and last year.

She was found guilty of the crime and sentenced to prison time plus six months of home confinement and another three years of supervision. A U.S. District Judge also ordered Esteves to pay back the money she took and perform community services.

Esteves must report to prison in March.

Tuesday, January 13, 2015

Oklahoma Pastor Sentenced For Embezzling More Than $900K From Charity

From KOTV Ch. 9 on 1/12/2015:

Tulsa Pastor Willard Jones got a prison sentence Monday for embezzling money from charity. He'll serve time and have to pay back as much of the money as he can - over $900,000.

Jones stole money intended for a community center, and Monday in court the judge said Jones was prompted purely by greed.

Just over two years ago, Jones was earning praise for a significant achievement, the opening of the Cornerstone Community Center.

Monday, he walked out of federal court and heads to federal prison in a month.

Jones was the fundraiser in chief for the community center, raising money from his own church congregation and tapping contacts at large foundations.

Federal officials said large donors started having doubts after Jones kept asking for more money to keep the center going.

Prosecutors said Jones paid on his house, bought a Rolex watch and a mink coat with money stolen from donors.

"We're pleased with the decision of incarceration and the amount of time he sentenced him to today," said U.S. Attorney, Danny Williams.

Jones sentence is 37 months in custody. He'll have to serve at least 85 percent of the time.
He'll have three years on parole after that and pay restitution of $933,500 or at least 10 percent of his income after prison.

"They'll get part of it back and we're going to try to get all of it back. Right now, we're going to sell his home and all of that money will go toward restitution, then, once he's released from the penitentiary, he'll be responsible for the balance," Williams said.

The judge told Jones: "I know you're in a valley right now, but you'll be up again. I believe that. There are lots of examples of people finding their path in prison. That's my hope for you."
Jones stepped aside from the leadership of his church, and now has until February 26th to report to federal prison.

When the sentence was announced, Jones started shaking and had to sit down. He recovered in a few minutes and the judge finished sentencing.

Missouri Man Sentenced For Embezzling Nearly $3 Million In Payroll Scheme

From on 1/10/2015:

A Franklin County man who formerly operated a payroll services company in St. Louis County has been sentenced to more than four years in prison and ordered to pay more than $3 million in restitution for stealing from clients.

Bradley Ferguson, 48, Washington, was sentenced Wednesday by U.S. District Judge E. Richard Webber to 54 months in prison on federal mail fraud and money laundering charges. He pleaded guilty in August to the two felony charges in the case.

Defendants in federal criminal cases typically serve 85 percent of their sentence.

Judge Webber also ordered Ferguson to pay $3,067,137 in restitution to former clients, according to the U.S. attorney’s office.

Ferguson was facing a maximum 20-year sentence for mail fraud and five years for money laundering.

Ferguson owned Fenton-based Paymaster Business Solutions Inc. He is accused of withdrawing money from the bank accounts of business clients to pay federal, state and local taxes but did not make the payments.

He then withdrew more than $2.7 million from client accounts in 2013 in an attempt to cover the tax payments after IRS inquiries.

The U.S. attorney’s office said Ferguson’s clients included churches, youth organizations, child daycare facilities, law firms, and other businesses.

According to an indictment handed up by a federal grand jury, from January 2005 through January 2014, Ferguson drafted funds directly from Paymaster business clients’ bank accounts in order to pay their federal, state, and local tax liabilities. However, Paymaster, at Ferguson’s direction, failed to forward the Paymaster business clients’ funds to the taxing authorities in order to pay their tax liabilities.

Paymaster drafted in excess of $2,700,000 from Paymaster business clients’ bank accounts to pay clients’ federal, state, and local tax liabilities, as well as FICA liabilities, for the period July 2013 through December 2013, but were not forwarded to the proper taxing authorities, the indictment alleged.

Additionally, the indictment alleged that Ferguson, as power of attorney for Paymaster business clients, was contacted directly by the IRS and questioned as to the failure to pay clients’ federal tax liabilities. Ferguson did not tell his clients about the IRS inquiries. When clients occasionally learned that Paymaster had not forwarded their funds to the taxing authorities, Ferguson lied to them and told them Paymaster had made the payments, according to the indictment.

Finally, the indictment states that in December 2013, Ferguson retained the services of a commercial shredding company and directed that the Paymaster business client records be shredded and removed from the Paymaster offices.


Read the whole story here.

Michigan Man Pleads Guilty In $625K Embezzlement Case

From the Battle Creek Enquirer on 1/12/2015:

A man who took more than a half-million dollars from a Battle Creek insurance agency faces a prison sentence after pleading guilty Monday.

John Page, 44, of St. Joseph, pleaded guilty to charges of embezzlement, forgery and uttering and publishing between December 2008 and May 2014 when he was former president of the Worgess Insurance Agency at 2 W. Michigan Ave.

He faces up to 20 years in prison but Calhoun County Prosecutor David Gilbert estimated he will serve a minimum of five years under Michigan’s sentencing guidelines.

Page entered his guilty pleas after appearing with his attorney, John Gardiner of Kalamazoo, for a preliminary examination before Calhoun County District Judge Frank Line. Line sat as a circuit court judge to accept the pleas but Page will be sentenced later by a circuit judge. No date for that sentencing was set Monday.

Prosecutors have alleged that Page took money from the agency and also applied for loans for premium payments from other financial institutions.

They alleged he stole about $625,000 during those 51/2 years. He had been employed at the agency since 1991.

Several Worgess executives were in the courtroom and vice president Jacob Worgess said later that watching the plea was “kind of a mixture of sadness and relief.”

He said he watched an associate for 15 years enter a guilty plea.


Read the whole story here.

Update (3/9/2015): Page was sentenced to 20 years.  Read the update here.

Monday, January 12, 2015

Vermont Public Radio Appearance On 1/13/15 Regarding Embezzlement Epidemic In The Green Mountain State

I was on Vermont Public Radio's "Vermont Edition," program, hosted by Jane Lindholm, Tuesday at on the topic of the apparent embezzlement epidemic in the Green Mountain State.  Listen to the segment here:

New Mexico Man To Avoid Jail With Restitution Agreement In $3 Million Embezzlement Case

From the Santa Fe New Mexican on 1/9/2015:

A former top executive accused of embezzling about $3 million from Santa Fe’s general hospital will pay $250,000 in restitution under terms of an agreement announced this week in state District Court in Albuquerque.

But Richard Crabtree, former chief operating officer at what is now called Christus St. Vincent Regional Medical Center, won’t have to spend any time behind bars, according to the deal. In addition to paying back some of the money, the deal calls for Crabtree to serve five years probation.
Crabtree and his then-girlfriend, Loretta Mares of Albuquerque, were charged with multiple felony fraud counts in a case brought by the state Attorney General’s Office in 2012.
The pair were accused of funneling millions of dollars in payments for information technology services — some of which were determined to be unnecessary — to companies owned by Mares’ brothers.
According to court documents, Mares and Crabtree co-signed a loan for a Toyota Land Cruiser. The indictment states that funds obtained through the scheme were also deposited in various bank accounts held by Mares and Crabtree, and used to make payments on credit cards and country club memberships in Crabtree’s name. The documents also note that some of the money helped Crabtree fund construction of a home in Castle Rock, Colo.
Both defendants in 2012 pleaded guilty to some of the charges against them. But the pleas, which were accepted by District Judge Michael Martinez while the presiding judge in the case, Ross Sanchez, was out on medical leave, were rejected by Sanchez when he returned to the bench. Sanchez said terms of the plea bargain were not punitive enough.
Phil Sisneros, a spokesman for then-Attorney General Gary King, told The New Mexican in 2014, after the case had been pending for two years, that the Attorney General’s Office was going “back to square one” to try to renegotiate pleas that the judge would accept.
But Crabtree’s attorney, B.J. Crow, confirmed Friday that the “exact same” plea deals — calling for each co-defendant to serve five years probation and pay restitution as determined by the court — were later accepted by a third judge, Alisa Hadfield, after Sanchez retired.
Crabtree, 60, originally faced 19 counts. Mares faced 11 counts. Both took a deal to plead guilty to two second-degree felony counts of fraud over $20,000 and one third-degree felony count of conspiracy to commit fraud.
A determination on the amount of restitution had been scheduled as part of a court hearing on Thursday, but Crow reached a deal on the amount with the Attorney General’s Office right before the hearing.
Crow said the deal requires Crabtree to pay the first $50,000 of restitution by cashier’s check in the next two weeks. He said the former executive, who has late-stage cancer, will liquidate his life insurance to come up with that payment, and plans to sell the home in Castle Rock to get the remaining $200,000.
“His whole intention in entering into this restitution order is to make St. Vincent’s as whole as he is financially able to,” Crow said.
Crow said he feels the deal is fair given that Crabtree has no prior criminal history and that his crime was a “white collar,” or nonviolent, offense.
“He’s going out of his way to try to get them some money back,” Crow said.
Mares, 52, was also scheduled to appear for a restitution hearing Thursday. But she failed to appear, prompting the judge to issue a bench warrant for her arrest.
Mares’ attorney, Louren Oliveras, said in court Thursday that Mares, who also has cancer, missed the hearing because of a conflicting doctor’s appointment, according to the Attorney General’s Office, but the judge said Mares had ample time and notice to reschedule the hearing if necessary.
While neither defendant has been sentenced yet, under terms of the plea agreements accepted by Hadfield, neither will face jail time. “It’s a guaranteed no-jail deal,” Crow said.
But if they fail to abide by the agreed terms, each could face up to 21 years in prison.
The deal also would allow the judge to suspend their sentences, or give them conditional discharges, which would mean if they successfully completed probation, neither would have a felony conviction.
The case has moved very slowly. The crimes to which they pleaded guilty happened in 2007 and 2008, court documents show. They were reported to the Attorney General’s Office in 2008, but they weren’t indicted until nearly four years later, after Great American Insurance, which reimbursed the hospital for lost funds, filed a lawsuit against them.
During the three years since then, numerous uncontested continuances were granted in the criminal case.


Read the whole story here.

Saturday, January 10, 2015

Louisiana Woman Pleads Guilty To Conspiracy To Commit Bank Fraud

From the US Attorney's Office in Louisiana on 1/7/2015:

U.S. Attorney Kenneth A. Polite announced that CYNTHIA HEFLER, age 67, of Westwego, Louisiana, pled guilty in federal court today to conspiracy to commit bank fraud.

According to court documents, HEFLER, worked as the office manager for A & H Armature Works, Inc.  In her capacity as office manager, HEFLER handled the company’s accounts receivable and embezzled from the company business bank accounts at First American Bank.  HEFLER conspired with another to steal A & H Armature Works, Inc. funds in order to help pay off her credit card debt accrued through gambling.

HEFLER faces a maximum term of imprisonment of 5 years, a fine of $250,000 and 3 years of supervised release following any term of imprisonment for each count. U.S. District Judge Kurt K. Engelhardt set sentencing for April 1, 2015.

Note: the fact that the US Attorney's office was involved here suggests that the amount stolen was more than $100,000. 

Illinois Woman Indicted In $150 Embezzlement Conspiracy Against Walgreens

From the Deerfield Review on 1/8/2015:

Three women were indicted by a Lake County grand jury Wednesday, Jan. 7, for embezzling approximately $150,000 from Walgreens, authorities said.

Charisma Farrow-Smith, 33, of Hoffman Estates, was charged with two counts of theft, which is a Class 1 felony, and two counts of forgery, a Class 3 felony. Deerfield Police Sgt. Greg Hury said she created false invoices while working at the Walgreens corporate campus in Deerfield.

“She learned their invoice system, created three false companies and created invoices,” Hury said. “She labeled her compatriots as vendors on the invoice and they would cash the checks.”

Those payments totaled the approximately $150,000.

The checks went to Silverine Smith, 31, of Chicago, and Luciana Cardona, 38, of Carpentersville, both of whom cashed the checks, Hury said. They were charged with three counts of theft each, a Class 2 felony. Smith and Cardona, who could serve between nine and 21 years in prison if convicted on all counts, remain at large, according to the Lake County State’s Attorney’s office.

Farrow-Smith began working at Walgreens in early 2012 and left in August 2013, according to Hury. He said her activity came to the attention of the asset protection manager when proper tax forms could not be found and it could not be determined who received the money. The company contacted the Deerfield police and an investigation was conducted.

Farrow-Smith, who is free on a $50,000 bond, will be arraigned before Lake County Criminal Court Judge James Booras Jan. 22 in Lake County Criminal Court in Waukegan.

If convicted on all counts, Farrow-Smith could face between 12 and 40 years in jail, according to the Lake County State’s Attorney’s Office.

Read the whole story here.