Friday, February 27, 2015

South Carolina Woman Accused Of Embezzling $1 Million+ From Charter School In Vendor Fraud Scheme; Lived Lavishly

From The State on 2/25/2015:

Federal prosecutors Wednesday said a former public charter school director used shell companies to embezzle more than $1 million in federal funds provided to the school for food and educational purposes.

U.S. Attorney Winston Holliday alleged that 40-year-old Benita Dinkins-Robinson, director of the former Mary L. Dinkins Higher Learning Academy in Bishopville, siphoned off money using four shell companies – J and J Contracting, T and E Catering, New Age Computers and Project Reach – that accepted payments of school money.

The school was a part of the S.C. Public Charter School District – a growing group of 31 public schools with 17,000 students and 500 teachers across South Carolina in more than a dozen counties. The Legislature created the statewide charter school district in 2007 as a way to empower parents and others to set up public schools with different missions. The Dinkins school was closed in 2013 after the charter district voted to stop its funding.

The Dinkins school was in rural Lee County and qualified for Title I funding, which allowed it to receive money for food and education for the students from the U.S. Department of Agriculture and the U.S. Department of Education.

But testimony from Janice Crocco, a former 5th grade teacher at the Dinkins school, suggested that the federal funds never benefited the students.

Crocco, who worked for the school for a little over five months beginning in December 2010, said students would often go without meals at lunch because there was no food. In those instances, students would have to wait until pizza was ordered at the school just before they were dismissed.
Crocco also said the school’s overall cleanliness and organization was in disarray. She said when she would take her 12 students to the bathroom, she often brought toilet paper with her because there wasn’t any in the doorless stalls. She also said that Dinkins-Robinson was at the school only two to three days out of the week and would often not show up for scheduled faculty meetings.

Holliday alleged that Dinkins-Robinson would use the funding from the government to pay for a catering company, T and E Catering, to provide food for students. However, Eleazor Carter, Dinkins-Robinson’s attorney, said that while his client was a business partner in the catering company, the state’s charter school district approved of their services. Carter also conceded that Dinkins-Robinson was a founding member of Project Reach and that her brother owned New Age Computers.

Along with large cash withdrawals from the school’s account, Holliday said Dinkins-Robinson would make out checks to pay rent for the building in which the school operated that were in excess of the rent amount due. He alleged that she would spend the extra money on lavish vacations and shopping sprees.

The Dinkins school at first operated under the Lee County School District. It asked to be authorized as a charter school in Sumter County, reporting to the state charter school district, after receiving pushback and alleged harassment from Lee County, according to Carter.

Clay Eaton, a witness for the prosecution and a former public relations director for the charter school district, said when he inspected the school between 2010 and 2012 after it applied to be authorized by the charter district, he noticed the school would report inflated students numbers to the charter district, sometimes by the dozens.

Each public school and public charter school receives funding from state and federal entities on a per-pupil basis. If a public school has a large amount of special needs students or a large student population in general, it gets a higher per-pupil amount from the federal government.

U.S. Judge Terry Wooten dismissed Wednesday’s hearing early in light of the winter storm moving through the state. Wooten said the next trial session will be held Friday, weather permitting.

Update (3/12/2015):  Benita Dinkins-Robinson found guilty by a jury of embezzling at least $750,000 and as much as $1 million.  Read an update of the story here.


Thursday, February 26, 2015

California Woman Sentenced To 5+ Years For Embezzling $3.5 Million

From the Orange County Breeze on 2/25/2015:

A Huntington Beach woman was sentenced today to 63 months in federal prison for embezzling nearly $3.5 million from her former employer, a warehouse and trucking-services company.
Patricia A. Francisco, 62, was sentenced today by United States District Judge Cormac J. Carney after the defendant pleaded guilty in August to four counts of wire fraud.

In addition to the prison term, Judge Carney ordered Francisco to pay $3,474,199 in restitution to her former employer, California Multimodal, LLC (CM), which is based in Long Beach.

For more than fifteen years, Francisco stole money from CM, where she worked as a bookkeeper.
According to court documents, Francisco used three basic means to misappropriate company funds:
  • she stole company checks, which she made out to “cash;”
  • she caused checks to be written to legitimate vendors, which she then stole and deposited into her bank accounts; and
  • she created bogus expense vouchers for other employees, which allowed her to obtain checks that she deposited into her own accounts.
As part of her scheme, Francisco used a signature stamp belonging to her boss to sign the checks.
Francisco used the money to finance personal expenses, such as a $300,000 down payment on her house, a down payment on a condominium, a $40,000 Cadillac Escalade, approximately $100,000 worth of jewelry, and numerous trips to locations like Hawaii.

Francisco told investigators that she stole the money “because she wanted a better life,” prosecutors wrote in a sentencing memorandum filed with the court that cited a simple motive for the crimes: “greed — she wanted to live a more luxurious lifestyle.”

Woman Indicted On Federal Charges For Emebezzlment From Washington State Non-profit

From the Bonney Lake Courier-Herald on 2/24/2015:

The former bookkeeper for the St. Vincent de Paul Society Stores of Tacoma, Washington, was arrested yesterday afternoon on an indictment returned by a federal grand jury charging her with multiple counts of wire fraud and aggravated identity theft, announced Acting United States Attorney Annette L. Hayes.  ANGELA TONEY SAUCIDO, 44, was arrested in Phoenix, Arizona.

SAUCIDO moved from the Tacoma area to Phoenix in 2007, but continued to work for the charity as its bookkeeper.  The indictment alleges the embezzlement began at least in 2006 and continued through July 2013.  SAUCIDO will make her initial appearance in U.S. District Court in Arizona today, with future court appearances in Tacoma.

According to the indictment the embezzlement scheme involved a variety of frauds.  SAUCIDO would transfer funds from the St. Vincent de Paul Society Stores bank accounts to her own bank accounts and falsify entries making it appear the transfers were for legitimate purposes.  SAUCIDO forged signatures on checks and made electronic fund transfers to benefit her and her family.

 SAUCIDO made purchases for her personal use on the St. Vincent de Paul Society Stores Home Depot credit account, and then used the charity’s funds to pay for the purchases.  Finally, SAUCIDO used the identities of other employees to make it appear they had received additional pay when in fact she had deposited the money into bank accounts she and her husband controlled.

The indictment charges seven counts of wire fraud and four counts of aggravated identity theft.  Wire fraud is punishable by up to 20 years in prison and a $250,000 fine. Aggravated Identity Theft is punishable by a mandatory two years of prison that must follow any term imposed on the wire fraud counts.


Read the whole story here.

Florida Man Sentenced To 2 Years For Embezzling More Than $1 Million From Art Gallery

From the Associated Press on 2/24/2015:

An Orlando-area art gallery employee has been sentenced to two years in prison for embezzling more than $1 million.

Jeffery Hall, of Maitland, was sentenced Monday to federal prison. Hall pleaded guilty to mail fraud in November.

Hall worked at an Orlando-area art gallery with locations in other parts of Florida. Prosecutors say he diverted proceeds from the sale of artwork to his personal bank accounts. They say he also used the gallery's artwork as collateral for loans.

California Woman Accused Of Embezzling $650K From Winery Pleads Not Guilty; Ran Local Crime Stoppers Web Site

From the Napa Valley Register on 2/24/2015:

A St. Helena woman accused of embezzling $650,000 from a winery pleaded not guilty to the charges on Tuesday.

Gerilee “Geri” Densberger’s next hearing will be on March 18 at 8:30 a.m. in Napa County Superior Court. She remains in jail, with bail set at $500,000.

Densberger was briefly a fugitive earlier this month before turning herself in to authorities. She’s familiar with fugitives — Densberger for years oversaw the Napa Valley Crime Stoppers website, where her name and photo appeared prior to her arrest.

Densberger, 50, is accused of stealing the money from Whitehall Lane Winery near St. Helena, where she worked as a bookkeeper and assistant between 2009 and last year, according to court records.

She’s suspected of embezzling more than $400,000 in payroll funds and depositing the money in bank accounts she controlled with her husband, Joseph Densberger.

She’s also accused of charging more than $200,000 to a credit card she opened in the winery’s name to pay her son’s college tuition and travel expenses in Nebraska, court records said.

She was fired from the family winery in November after the allegations were uncovered. The winery owners are also suing Densberger’s family to recoup the money, according to a civil complaint.

Thomas Leonardini Sr., owner of the winery, told the Register his family was shocked at the level of her dishonesty.

“Ms. Densberger was a trusted employee and was treated like a member of our family. Sadly, her actions have and will continue to hurt her own family and have a lasting effect on them.”

Densberger, a former board member at Napa Valley Crime Stoppers, resigned in November after the accusations.

In an interview in 2012, Densberger said she volunteered about 10 hours a week for the nonprofit organization, which gives cash rewards of up to $1,000 to anonymous tipsters for information leading to the arrest of suspects and fugitives.

California Woman Accused Of Embezzling $438K From Catholic School

From CBS Los Angeles on 2/24/15:

A former office manager for Holy Family Cathedral School in Orange was arrested Tuesday on charges of embezzling more than $400,000 from the school over a five-year period.

Adela Maria Tapia, 40, of Tustin, was arrested outside Mater Dei High School in Santa Ana as she dropped off one of her children for school, Senior Deputy District Attorney Marc Labreche said. She is accused of stealing about $438,000 between September 2006 and September 2011.

Tapia coordinated Holy Family’s scrip card program — fundraising cash cards which the school bought at a discount and sold at face value.The scrip card program raises about $200,000 for the school each year, prosecutors said.

Tapia allegedly took scrip cards from the school’s safe, sold them and kept the profits from those who paid cash, Labreche said. She also allegedly ordered scrip cards and pocketed the cash payments from selling them.

Labreche said Tapia sold the cards to family members, including an ordained deacon in the Diocese of Orange, for “lifestyle enhancement using other people’s money.” Prosecutors say Tapia used some of the stolen funds to buy luxury clothing and goods from department stores and to pay for tuition for her children at Holy Family Cathedral School and Mater Dei.

The alleged scheme was uncovered when Tapia was transferred to an office manager job and $120,000 in scrip cards were found missing.

The Diocese of Orange released the following statement:

“In 2012 Holy Family Cathedral School in Orange discovered that an employee had violated the trust of the school and parish through their mismanagement of the school’s scrip program. This employee was immediately released from their employment at the school after the irregularities in the scrips program were discovered and the matter was referred to law enforcement. After an exhaustive investigation the Orange County District Attorney has decided to pursue several criminal charges in this case.”

The school has since “instituted more robust financial controls to ensure this issue is not repeated,” according to the statement.

Labreche said the Diocese has been fully cooperative in the investigation.

Tapia, who is charged with two felony counts of grand theft by embezzlement and 13 felony counts of money laundering, was scheduled to be arraigned Wednesday. She could face up to 14 years and four months in prison if she is convicted at trial.

The case took several years to investigate because of its complexity, Labreche said.

“There’s 83,000 pages of discovery (evidence) in this case,” Labreche said.

Wednesday, February 25, 2015

Texas Woman Found Guilty To Embezzling $156K From Machine Shop

From the News-Journal on 2/24/2015:

A former machine shop employee was sentenced to 40 years in prison Friday for embezzling more than $150,000 over several years.

Tanya Marie Warrell McMillian, 43, of Whitehouse was found guilty of second-degree theft, but the prosecution was able to enhance her punishment to first-degree theft because of three prior felony convictions. McMillian also was assessed a $10,000 fine.

Rusk County District Attorney Micheal Jimerson said that “over the course of several years,” McMillian stole approximately $156,000 from her employer by altering the books or forging signatures.

“When the owners of the business confronted her about some of these discrepancies she admitted, on audio recording, that she did not know why she did it,” he said.

McMillian was arrested May 11 by Texas Department of Public Safety troopers.

Virginia Woman Accused Of Embezzling More Than $200K In Goods From Retailer

From NBC Washington on 2/23/2015:

A J.C. Penney employee in Virginia has been accused of stealing items worth hundreds of thousands of dollars from the store and reselling them.
Teresa Ann Stockton allegedly stole jewelry, women's clothing, cosmetics and perfume from the J.C. Penney store at Springfield Town Center. According to a search warrant, the investigation began when a store loss prevention officer reported items worth a total of $200,000 had been stolen from the store over the past two years.
Police were then given a list of jewelry department employees and discovered that Stockton had pawned numerous jewelry items. Court documents also revealed that she was selling merchandise on her eBay account.
Police seized jewelry, clothing and a watch from Stockton's Springfield home.
Stockton has been charged with two counts of embezzlement.

Michigan Woman To Face Trial For Embezzling $131K From Local Township; Had Served As Town Clerk

From The Times Herald on 2/23/2015:

Former Clay Township clerk Lisa White will face trial on charges of stealing more than $100,000 from the township.

White, 45, waived her preliminary examination Monday in St. Clair County Judge Cynthia Platzer’s courtroom on charges of embezzlement by a public official and embezzlement of more than $100,000.

White remained quiet while she stood beside her lawyer, Arthur Garton, during much of the court hearing. She told Platzer that she had moved from Harsens Island to an address in Fair Haven.
White declined to comment on the case prior to the hearing.

Police have said White embezzled about $131,000 from the township between 2009 and 2014.
She allegedly added the money to her husband’s salary at the township fire department, and her own salaries as clerk and as captain at the Clay Township Fire Department.

Embezzlement by a public official is a 10-year felony. Embezzlement of $100,000 or more is a 20-year felony.

White resigned her position as clerk last week. She had not been to the township offices since the November election.

She was elected clerk in 2008 and was paid about $55,000 a year as clerk.

Clay Township Supervisor Artie Bryson said anyone interested in completing White’s term as clerk should send a resume and cover letter to White’s term expires Nov. 20, 2016.

The board will consider those applications received.

The township board has 45 days to appoint a new clerk. Otherwise, the matter will be decided in a special election, Bryson said.

In October, Clay Township said it expected it would face about $700,000 in fines from the Internal Revenue Service because of errors made in the clerk’s office.

The Michigan State Police began an investigation into the matter, which led to the embezzlement charge against White in early February.

A second charge of embezzlement of $100,000 or more was added Wednesday.

White served on the township fire department up until the township board of trustees removed her from her position as captain in November.

White’s $50,000 bond was continued at the end of the hearing Monday. A date for White’s circuit court arraignment has not been set.

Florida Woman Sent To Prison For Embezzling Again While On Probation For Conviction In $400K Embezzlement Case

From the Bradenton Herald on 2/21/2015:

Already convicted of fraud, Bradenton bookkeeper, sentenced to prison for committing more fraud

MANATEE -- A Bradenton bookkeeper was sentenced to eight years in prison after violating her probation from a 2009 case in which she embezzled more than $400,000 from an employer by committing fraud against another employer, voter fraud and insurance fraud, according to the State Attorney's Office.

Annique Lesage, currently going by her married name, Annique Newton, will serve eight years in a Florida prison followed by 15 years probation in which she will be required to complete paying her restitution and undergo a physiological evaluation, according to a news release.

Lesage's first violation arose after her arrest in July 2013, when she was charged with scheming to defraud Cactus Sky Communications, a small Bradenton marketing firm, after allegedly helping herself to more than $17,000. At the time, she was still on probation for the sentence she received in a 2009 Sarasota case when she was convicted of first-degree grand theft and fraudulent use of credit cards.

Newton received a 21.9-month prison sentence and 28 years' probation in that case.

The terms of Newton's probation stipulated that she needed to report any new employment to her probation officer, who then must contact the employer to assure them she was not handling money.

Lesage is set to stand trail in the scheming to defraud case during the March 16 two-week trial period.
In November, Lesage was sentenced to credit for time served after entering a plea of no contest in the voting-fraud and insurance-fraud charges against her. ... Read the whole story here.

Read more here:

California Woman Sought In $1.86 Million Embezzlement; Used Alias To Originally Get Job

From the Orange County Register on 2/20/2015:

The FBI is searching for a fugitive accused of embezzling $1.86 million from her employer under a false name last year, the agency said in a criminal complaint file Feb. 11.

From May 2013 to September 2014, investigators said Alma Edith Letona, using the name Olga Figueroa, used her position as a payroll tax account at Roth Staffing Companies in Orange to divert company funds into a personal bank account.

Most of the deposit amounts were in the hundreds of thousands of dollars, the complaint said. Letona used the stolen money to purchase two Lake Forest properties - one in her own name. The United States Attorney's Office has since filed to take control of the properties.

Letona was employed at Roth from March 2013 to October 2014. She was fired because of attendance and time card issues, the complaint said.

Two months after being let go, the company discovered 10 unauthorized wire transfers made to a Bank of America account in the name of Roth's third-party payroll processing service.

Letona opened the account in September 2014 under Andrea Elizabeth Letona, and put herself as the signatory.

In addition, she took 200 checks intended for employees hired by Roth and deposited them into a Navy Federal Credit Union account. The checks were eventually reissued to the right employees.

Investigators found out Letona's real name after examining a personal check she provided Roth for direct deposit information. Her real name was scratched out, and the false name was handwritten above. Examining the check under a light revealed the scratched-out name.

Letona's alias include Olga Iris Figueroa, Alma Olga Iris Manjama and Olga Iris Manjang.

Anyone with information as to Letona's whereabouts should contact the FBI at 714-939-8699.

Pennsylvania Man Accused Of Embezzling Nearly $300K From Local Metal Fabricator

From WGAL News 8 on 2/21/2015:

Police say, charges have been filed against Ryan S. Troop of York in connection with the embezzlement of close to $300,000.

Hellam Township police began investigating missing money from Stewart Welding and Fabrication in Wrightsville in December.

Investigators say, with the assistance of the business, it was discovered that Troop had embezzled the money by creating an unauthorized credit card and used company funds to pay off the card.
According to police, Troop also used an authorized card provided by the business to make personal purchases, but then submitted altered credit card statements for payments on the accounts.

Iowa Woman Pleads Guilty To Embezzling $123K From Bank

From The Gazette on 2/21/2015:

A former Manchester bank secretary pleaded guilty Friday to embezzling over $123,000 from the bank over a two-year period.

Ann Marie Sperfslage, 54, pleaded guilty in U.S. District Court to one count of embezzlement by a bank employee. During the hearing, Sperfslage, the former secretary to the bank’s executive vice president, admitted embezzling $123,181 from May 2008 to May 2010 from First State Bank. She also admitted to embezzling with the intent to defraud the bank.

According to the plea agreement, she had worked at the bank since 1992. She was the vice president’s secretary and also worked with the bank’s software and computer systems until she was terminated in 2010. According to the plea agreement, Sperfslage created false electronic records and documents showing that the bank had loaned her and her husband more money than the bank actually loaned them. They had two home equity loans for $50,000 and $35,000 and another loan for $3,500, but she changed the electronic records to $99,700 and $90,000 for the home equity loans and $18,000 on the other loan.

She also deposited other customers’ deposits in her accounts so that it appeared as if she was making payments on the loan, according to the plea agreement.

Sperfslage also reversed the false deposits and then deposited the funds into the correct accounts before the customers and bank discovered she had misapplied the deposits. She misapplied $81,946 in customers’ deposits over the two years, the plea deal said.

She faces up to 30 years in prison and fines up to $1 million. She also will be ordered to pay restitution.

Thursday, February 19, 2015

California Woman Accused Of Embezzling $100K From Brokerage Firm

From the Desert Sun on 2/18/2015:

A La Quinta woman is accused of embezzling $100,000 from a brokerage firm where she worked.
Isabel Sonia Bandzej, 48, was arrested 7:30 a.m. Friday at her home in the 54-000 block of Avenida Velasco, according to the Riverside County Sheriff's Department.

Her job was to maintain payment invoices for clients of the company. Its name wasn't released.
According to the sheriff's department, the suspect took money from a business bank account over the past year. An investigation began recently after the business owner received a collections notice from a client.

Authorities searched the suspects home and found evidence that supported allegations of embezzlement.

Bandzej was arrested on 50 counts of embezzlement and 47 counts of burglary, according to the sheriff's department.


Read the whole story here.

Tuesday, February 17, 2015

Texas Woman Sentenced To 3+ Years For Embezzling $366K From Bank

From KLTV Ch.7 on 2/17/2015:
A 55-year-old Murchison, Texas woman has been sentenced to federal prison for embezzlement in the Eastern District of Texas, announced U.S. Attorney John M. Bales.
Deborah Cornett pleaded guilty on June 9, 2014 to embezzlement by a bank employee and was sentenced to 41 months in federal prison Tuesday by U.S. District Judge Leonard Davis. Cornett was also ordered to pay restitution in the amount of $365,988.43.

According to information presented in court, from November 2007 to May 2013, Cornett was an officer and employee of the First State Bank of Ben Wheeler. During that time, Cornett embezzled from bank payroll accounts, the bank Christmas Club account, certificates of deposit, and from fraudulently issued bank loans.


Read the whole story here.

Monday, February 16, 2015

Nebraska Man Sentenced For Embezzling $259K From Insurance Clients

From the Lincoln Journal Star on 2/13/2015:

Gerald C. Bryce of Raymond will serve 18 months in prison and three years on supervised release for committing mail fraud.

As an insurance agent, Bryce, 50, collected premium payments from customers to be sent to the company providing the coverage, U.S. Attorney Deborah R. Gilg said in a news release. But one couple found that their life insurance policies lapsed because he had not forwarded the money. In 2011, they had paid him $259,167.19 for life insurance policies that had lapsed.

His failure to do so was not immediately discovered as Bryce had the information from the insurance companies mailed to him. After learning of the lapsed policies, the victims filed a civil suit and, as part of a settlement in that case, Bryce did pay some of the money he stole.

In 2010, he defrauded another couple of $41,983.55, telling them to withdraw the cash value of a life insurance policy they owned and give him the money for safekeeping. He said he was concerned about a former business partner taking the money. Bryce then changed the mailing address of that couple to his address and kept the money for himself.

The federal judge who sentenced Bryce also ordered him to pay $107,591.51 to the two couples. That amount accounts for the losses they incurred that were not covered by the civil case.


Read the whole story here.

Sunday, February 15, 2015

Profile of an embezzler: You'd be surprised

From The Northwoods River News on 1/26/2015:

Embezzlement is big business in the United States - in both large firms and small, in both urban areas and rural - and it has been getting bigger all the time.

There's no doubt the Great Recession helped to spike the numbers, not only because more employees steal during tough times but also because employers exercise more oversight. But embezzlement numbers were growing even before the recession began: According to the FBI, embezzlement arrests rose by about 30 percent between 2003 and 2007.

And while embezzlement statistics may fall back from the peaks of the recent recession, the long-term trend is expected to continue upward. As it is, 2013 was a record, up 5 percent over 2012, which itself was a record.

A big question is, why the prevalence of this particular crime? Many experts do indeed point to the economic downturn, while others finger individual financial stress in any economy, good or bad. Still others believe the persistence of light sentencing is a factor.

All of those elements no doubt play a role, but Christopher T. Marquet, the author of an annual report on embezzlement and CEO of the security consulting firm Marquet International, says it is more complicated than that.

"I do think that more significant sentences might have some added deterrent effect - but that goes only so far," Marquet told The Lakeland Times in an interview. "I think that this crime in some cases becomes almost like an addiction that is hard to stop once it has gotten going and a lifestyle established - irrespective of sentencing."


Read the whole story (Part 2 of a series by Richard Moore, investigative reporter) here.

Former President Of Tribal College In Montana Set For Trial In $242K Embezzlement/Kickback Conspiracy Scheme

From the Great Falls Tribune on 2/13/2015:

The former president of Stone Child College and her husband face trial next week on charges alleging they conspired to use federal money to overpay a construction company for work on the Rocky Boy’s Indian Reservation in exchange for kickbacks totaling just over $242,000.

Melody Henry and Frank Gregory Henry, who was the college’s facilities department manager, each pleaded not guilty on Feb. 10 to conspiracy to embezzle federal funds, theft from an Indian tribal government receiving federal funds, accepting a bribe and theft from an Indian tribal organization.

U.S. District Judge Brian Morris scheduled their trial for Feb. 17 in Great Falls.

Prosecutors allege the Henrys conspired with Hunter Burns Construction, awarding about $530,000 in federal contracts in exchange for $242,000 in kickbacks between September 2010 and December 2012.

California Woman Sentenced To Probation For Embezzling $260K From Private School

From the Long Beach Post on 2/12/2015:

A secretary at a Long Beach Catholic school was sentenced Wednesday for stealing more than $260,000 from the school, according to a statement from the Los Angeles County District Attorney's Office (LADA).

Maria Guadalupe Hernandez, the 35-year-old secretary for St. Barnabas Parish School, was found guilty on January 28 in a bench trial of three counts of grand theft by embezzlement.

Prosecutor and Deputy District Attorney Brian Kang said in court Wednesday that even though the school seemed to be struggling financially for years, it wasn't until 2011 that officials "became aware of irregularities in the use of the school's fundraising account and began an investigation."

During an investigation, officials found that Hernandez, who had been with the school since1999 had stolen more than $260,000 from the school's fundraising account between 2009 and 2011.

Hernandez paid back $50,000 of the $260,647.40 at Wednesday's sentencing and also provided a security on two properties for the remaining $210,647.40. Because of this initial repayment, Los Angeles County Superior Court Judge James D. Otto suspended the maximum sentence of six years and four months in state prison, according to the LADA.

Instead, Hernandez was sentenced to five years of probation and was ordered to pay the remaining $210,647.40 of the stolen money back to the school during those five years.

Nebraska Woman Pleads No Contest To Charges Related to $2.5 Million Embezzlement Conspiracy With Her Father

From the Fremont Tribune on 2/11/2015:

A Fremont woman facing charges in connection to an embezzlement scheme was found guilty Wednesday in Dodge County District Court.

Joleen Cameron, 42, of Fremont pleaded no contest and was found guilty of theft by receiving stolen property, and two counts of attempted filing false income tax returns, all Class I misdemeanors.

Dodge County Attorney Oliver Glass said Cameron faces up to three years in prison when she is sentenced March 27.

Cameron was arrested on June 9 on charges connected to an alleged embezzlement scheme involving her now deceased father, Dennis Hesman.

Hesman was arrested June 4 on 10 counts of theft by deception and one count conspiracy to commit theft by deception. Each count is a Class III felony and carried a potential one- to 20-year prison sentence.

Hesman pleaded not guilty to all charges July 21 in Dodge County District Court, and died 10 days later at the Veteran’s Hospital in Omaha.

In its case, the state alleged Hesman, the former superintendent at Gavilon Grain in Fremont, created false tickets for commodities between 2007 and 2013 that led to his receiving nearly $2.5 million.

During Wednesday’s arraignment, Glass told the court some of the money embezzled by Hesman was turned over Cameron, which she did not claim when filing her taxes in 2011 and 2012. Glass said Cameron has paid the state a substantial sum of money in back taxes.

A civil suit seeking to recuperate lost funds has been turned over by Gavilon Grain to its insurance company. The state could seek restitution in the case at sentencing, Glass told the court.

Mississippi Conspirators To Plead Guilty In Non-Profit Embezzlement/Kickbak Scheme

From the Sun Herald on 2/10/2015:

The last two of three people accused of embezzling money from the Mississippi Gulf Coast Community Action Agency in Gulfport have informed the court of their intent to plead guilty.

The Sun Herald reports ( ) the attorneys for Linda Harvey-Irvin, the agency's former director, and Markuntala Croom, a contractor from Columbia, filed the motions Monday in U.S. District Court. They, along with contractor Donald Walton of Vicksburg, have a plea date of Feb. 19.

Harvey-Irvin, Walton, and Croom are accused in the indictment of federal program fraud and other charges.

Harvey-Irvin is accused of accepting over $91,000 in kickbacks from Croom, while Croom received about $660,000 for fictitious work as a contractor. Harvey-Irvin is also accused of accepting $31,000 in kickbacks from Walton in exchange for $365,000 in contracts.

Oklahoma Woman Charged With Embezzling $470K From Police Unions

From Tulsa World on 2/112/2015:

The former longtime treasurer of the state and Tulsa Fraternal Orders of Police was charged Wednesday with embezzling $470,000 from the two organizations.

Lorna Jean Vanlandingham, 71, is charged in Tulsa federal court with two counts of wire fraud. She is accused of stealing $403,126.98 from the Tulsa Fraternal Order of Police Lodge No. 93 and $67,278.53 from the Oklahoma State Fraternal Order of Police over a four-year period.
Clay Ballenger, Tulsa FOP president, said Vanlandingham was immediately removed as treasurer when the organization discovered in April 2014 what it believed were “misappropriations of funds.” The local FOP quickly filed a report with the Tulsa Police Department and notified the state FOP, Ballenger said.

“It was just under the course of normal business,” Ballenger said, noting that the board of directors routinely looks at expenses. “We just noticed some things that didn’t quite seem right and started asking questions.”
The investigation ultimately was turned over to the FBI and the U.S. Department of Justice.
Ballenger estimated that Vanlandingham, who goes by Jean, had been treasurer for around 15 or 20 years. Tulsa World archives indicate that she was the group’s treasurer in 1995.
Ballenger said she retired from the Tulsa Police Department in 2003.
He doesn’t think anyone else was involved in the embezzlement, he said.
“It was a surprise and a shock to us and our members,” he said. “She was a trusted officer of our organization. As police officers, you want to trust each other.”
Ron Bartmier, president of the state FOP, said that organization also found misappropriations and that Vanlandingham was “relieved of her duties” at that time. He estimated that Vanlandingham had served as its treasurer for 15 years.
The Tulsa FOP embezzlement began first, according to the informational filing. Prosecutors allege that Vanlandingham, on or before Jan. 5, 2010, began to make transfers from the local FOP’s bank accounts on behalf of the organization but actually used the money for her own purposes.
Prosecutors allege that a few months later she began defrauding the state FOP, as well. The court documents contend that Vanlandingham, on or before April 6, 2010, began obtaining state FOP funds by writing checks and making other transfers on behalf of the organization but again used the proceeds for her own purposes.
Both schemes continued until late April of last year, the documents indicate.
According to a July 1995 Tulsa World article, Vanlandingham was the ninth female officer hired by the Tulsa Police Department. She said she chose to become a police officer at 34 years old, beginning her career in 1978. She said hiring female officers was uncommon, with women having to prove themselves more back then.
“Being an officer was something I had always wanted to do, but my priorities had been raising my family and completing my education,” Vanlandingham said at the time.
The article also stated she was the “treasurer and chief cook” for the Tulsa FOP.
Ballenger said the Tulsa FOP can sympathize with the victims its officers encounter every day because it, too, has fallen prey to a crime. He said the group and its members are cooperating with investigators and seeking justice.
“We want the full extent of justice to be served,” he said.

Update (2/23/15): VanLandingham has pleaded not guilty to the charges.  Read an update of the story here.

Wisconsin Accountant Sentenced For Tax Evasion On Income From $1.1 Million Embezzlement

From WSAU on 2/11/2015:

The woman who embezzled over a million dollars from a Minocqua based company is going to prison... but not for embezzling. 63-year-old Rebecca Hoff of Ironwood, Michigan was an accounts payable manager for the T.A. Solberg Company, which is the parent company to the chain of Trig’s grocery stores. Hoff was found to have taken the money with unauthorized company checks used to pay for personal credit card bills from January 2004 until December 2010.

Although T.A. Solberg’s company did not pursue charges for the embezzlement, Hoff never declared the money she embezzled as income on her federal tax returns. According to IRS calculations, Hoff embezzled more than $1.1 million over the seven years, resulting in an income tax liability of over 302-thousand dollars. She pled guilty to the tax charges in December.

Chief U.S. District Judge William M. Conley [sentenced Hoff] to 15 months in federal prison for filing false information in a 2008 tax return.

Iowa Attorney Allegedly Embezzles $7.8 Million From Clients; Commits Suicide

From the WCF Courier on 2/11/2015:

The future of a prominent Waterloo law firm is imperiled amid legal turmoil and malpractice accusations leveled at its former president.

“I think it is fair to say that lawyers who have been practicing at Gallagher, Langlas and Gallagher have departed the firm and are practicing elsewhere. And I think it’s fair to say that at some point in the future, there will be no lawyers practicing at the law firm,” said Greg Lederer, a Cedar Rapids attorney who is representing the firm.

He said Gallagher Langlas will continue to exist as a company while the legal claims and litigation play out.

The firm’s website,, which listed 10 attorneys in September, has been taken down, and a local credit union has asked the court to appoint a receiver to oversee the firm’s property after getting word it terminated its lease for office space.

The move comes months after clients began accusing former Gallagher Langlas president David Alan Roth of stealing settlement proceeds and insurance payouts and mishandling investments clients put up under a litigation investment scheme.

Roth, 51, took his own life in September, and former clients and creditors have since filed millions of dollars worth of claims against Roth’s estate alleging theft and unpaid debts.

In court records, representatives for Gallagher Langlas said the firm didn’t know about the thefts involving Roth. The firm said it didn’t offer investment opportunities or fund management services, and Roth had no authority to solicit or manage investments and wasn’t acting as an agent of the firm when he accepted the money.

Even so, Gallagher Langlas has been hit with malpractice and fraudulent misrepresentation lawsuits alleging the firm failed to supervise Roth.

The latest suits were filed Jan. 13. In one, relatives of Christopher Waller, who died in July 2013, said Roth had indicated he would set up conservatorships for Waller’s children using $374,452 from insurance policies. But after Roth’s death, the family contacted Gallagher Langlas and was told the firm didn’t have the funds, and Roth hadn’t set up the conservatorship, according to court records.

The family of Adam Schneider, who perished in a March 2013 grain bin accident in Waverly, filed a similar malpractice suit alleging similar circumstances with $64,164 in insurance proceeds. The Schneider family earlier filed a claim in Roth’s estate.

On Feb. 5, attorneys for Gallagher Langlas for the first time unveiled a list of 85 possible malpractice claims, some of which are already part of lawsuits or estate claims.

For 44 of the 85 claims, a dollar amount wasn’t listed or it wasn’t clear how much was sought.
Those with dollar amounts totaled $7.8 million. They ranged from $1.9 million for a woman who gave Roth money to invest down to $500 for a man who apparently didn’t like his name and paid Roth a retainer for a name change that was never filed.

In a step to conserve resources and time, the firm’s attorneys asked the court to combine all the claims, both those lodged against Roth’s estate and those against the firm.

“The only equitable and sensible remedy for this horrible circumstance is to bring all claimants” into one case and allow the claimants to determine how to divide the firm’s insurance proceeds “instead of litigating each claim in the normal course of civil litigation and depleting or exhausting the only asset worth pursuing,” the firm’s request states.

But first, there is the question of coverage.

According to court records, the insurance carrier for Gallagher Langlas, Minnesota Lawyers Mutual, is investigating the possibility of revoking its coverage because of false statements Roth allegedly made when he renewed the policy.

Lederer said MLM’s response wasn’t unusual for insurance companies faced with tort litigation.
On top of the malpractice suits, a local credit union has filed a suit seeking repayment of two business loans the firm took out in 2013.

Veridian Credit Union officials said in court records Gallagher Langlas owes $306,493 in principal with another $9,827 in interest and $18,075 in late fees. The two loans were due in full in June and October, and collateral included the firm’s equipment, accounts and letters of credit, court records state.

Court records show at the time of his death, Roth was buying the firm’s West Fifth Street office building and the adjacent former Carpenter’s Restaurant building from a trust run by the firm’s senior partner. The restaurant building was remodeled as a mediation center. Roth had obtained a $650,000 loan from Veridian Credit Union for the purchase, records show.


Read the whole story here.

Friday, February 13, 2015

Michigan Woman Accused Of Embezzling At Least $254K From Local Business, Sought By Authorities

From Clarkston News on 2/11/2015:

A woman accused of embezzling more than $250,000 from the local business for which she worked is being sought by Oxford Village Police.

Last week, an arrest warrant was issued for Shavon Westley, 35, a former employee of CAM Logic located at 38 S. Washington St. in downtown Oxford.

Westley, who was an office manager for the company, is facing one count of embezzlement of $100,000 or more and four counts of forgery. The embezzlement charge is a 20-year felony, while forgery is a 14-year felony.

"I feel personally betrayed," said Jim Carlisle, owner and president of CAM Logic. "It was just quite a stab in the back."
"I don't think she has any concept of the kind of impact she had on my company, on me personally, on my customers," he added. "She needs to learn a lesson."

CAM Logic specializes in three-dimensional scanning and printing technology. The company made headlines last year when it scanned the famous Spirit of Detroit and created miniature copies of the iconic statue.

According to village Police Chief Mike Neymanowski and Officer Dave Churchill, who conducted the investigation, Westley embezzled approximately $254,000 from the company between 2012 and 2014.

"That's what we have at this time," Neymanowski said. "There could be more."

The investigation began in September after both CAM Logic and its bank noticed some discrepancies in the financial records. "It was really the bank and us that kind of simultaneously discovered this," Carlisle said.

Since the investigation began, Westley has not set foot inside the CAM Logic building. "I suspended her without pay (pending) the outcome of the investigation and I've never heard anything more from her," Carlisle said. "She never came back to work."

Westley had worked for CAM Logic since 2010. According to village police, Westley's last known address was in Independence Woods, a manufactured home community located at 2500 Mann Rd. in Independence Township.

Anyone with information regarding Westley's whereabouts is asked to please contact the village police at (248) 628-2581.

Carlisle wished to make it clear the alleged embezzlement did not hurt his company's overall "financial well-being."

"I can tell you that CAM Logic is fine," he said. "CAM Logic, last year, had its best sales in its 20-year history. We had a record year. CAM Logic's financial situation is very, very sound. We've hired three additional people since (Westley) left."

Read the whole story here.

Two Texas Women Plead Guilty To Bilking Bank Out Of $800K

From News12 on 2/11/2015:

A former banker and another South Texas woman face up to 30-year prison terms in a check-cashing scheme.

Anita Arredondo pleaded guilty Tuesday to bank fraud in the scam involving about $800,000 in bogus construction company checks.

Prosecutors in Laredo say Petra Del Bosque earlier pleaded guilty to the same federal count.
Both women from Zapata (zuh-PAH'-tuh) were arrested last October.

Del Bosque formerly worked at Zapata National Bank. Arredondo was an accounts payable clerk for a construction company.

Investigators say Arredondo issued and endorsed more than 300 company checks made payable to contractors for work that was never done. Del Bosque told tellers that she was cashing the checks on behalf of contractors and would deliver the money.

The two women also face possible $1 million fines.

Former CFO Of Trade Association In San Francisco Sentenced For Embezzling $928K

From the San Francisco Appeal on 2/10/2015:

The former chief financial officer of a maritime shipping trade association has been sentenced in federal court in San Francisco to four years and nine months in prison for convictions related to his embezzlement of more than $928,000.

Robert Bradley Strahan, 51, of San Francisco, the former CFO of the Marine Exchange of the San Francisco Bay Region, was sentenced Monday by U.S. District Judge Thelton Henderson.

Strahan pleaded guilty before Henderson in November to two counts of wire fraud, one count of mail fraud and one count of tax evasion, and admitted he embezzled more than $928,000 from his employer.

The Marine Exchange is a nonprofit group that collects and analyzes maritime shipping traffic data. It was identified as Strahan’s employer in prosecution and defense filings and in public documents.

Strahan worked for the association from December 2007 through April 28, 2014, first as a contractor and then as chief financial officer.

Prosecutors said in a sentencing brief that Strahan’s embezzlement included $551,511 in checks he cashed from the exchange’s bank account; $257,638 worth of personal goods bought with the organization’s credit cards; and $118,986 in unwarranted payments to a friend whom he hired.

Henderson ordered him to pay a total of $1,105,481 in restitution, including $928,000 in repayment to the Marine Exchange and more than $175,000 in taxes due.

Strahan has been in custody since his arrest on May 30, 2014, according to U.S. Attorney Melinda Haag.

2 Supermarket Advertising Executives In Michigan Charged With Embezzling As Much As $150K

From WZZM13 on 2/10/2015:

WALKER, Mich. (WZZM) - Two advertising managers at Meijer corporate headquarters in Walker are being charged with embezzling between $20,000 and $100,000 from the company.

Tracy Gordon, 45, and 63-year-old Danny Vandermyde are accused of converting gift cards for their own use.

The alleged crimes took place between August 2010 and October 2014.

According to court documents, Vandermyde admitted to Meijer investigators that he used between $50,000 and $100,000 worth of cards. Gordon admitted to using between $20,000 to $50,000 worth of cards.

If they're convicted, Vandermyde faces up to 15 years in prison and Gordon faces up to 10 years.

California Woman Pleads Guilty To Embezzling $317K From Law Firm; Spends Money Shopping

From The Business Journal on 2/10/2015:

Madera County resident Shelley Corkins pleaded guilty to three counts of wire fraud in connection with her embezzlement from a Fresno law firm where she used to work.

Corkins admitted that while employed with the law firm, which was unidentified in federal court filings, she embezzled at least $317,000 from the firms books in her position as bookkeeper and accounting supervisor, according to a news release.

The federal government originally filed 44 counts of wire fraud relating to fradulent credit card purchases and money transfers, though Corkins accepted a plea deal on three counts.

Between 2008 and 2012, Corkins was accused of using the firm's credit cards for personal shopping excursions at stores including Toy "R" Us, Victoria's Secret and Nordstrom Rack.

Corkins is scheduled to be sentenced by Senior U.S. District Judge Anthony W. Ishii in Fresno on May 11. The maximum statutory penalty for each of the three counts of wire fraud is 20 years in prison and a $250,000 fine.

Read the original FBI announcement here from 2013 which claims Corkins stole some $580K

Former Bank Officer In New Jersey Charged With Embezzling $1.2 Million

From the Cliffview Pilot on 2/10/2015:

A federal grand jury in Newark today indicted a former assistant vice-president at BankAsiana in Fort Lee on charges of embezzling more than $1.2 million from her employer.

Miye Chon, 34, of Englewood Cliffs — also known as Karen Chon — made a series of unauthorized transfers from customers’ CDs into the bank’s vault cash account, then walked out with the money over the course of several years, the indictment alleges.

Dozens of illegal transfers typically went for tens of thousands of dollars at a time, although one was for $100,000, it says, in charging Chon with one count of bank fraud and 27 counts of theft, embezzlement or misapplication of funds by a bank officer or employee.

“Bank records show that during one week between September 27, 2013 and October 4, 2013, Chon’s last day working at the bank, she made multiple unauthorized transfers from customer accounts totaling approximately $1.2 million to cover losses in other customer accounts that she had previously looted,” U.S. Attorney Paul S. Fishman said after Chon surrendered to FBI agents this past September.

Officials said the scheme ended up costing the bank $1.4 million.

After BankAsiana was acquired in October 2013, officials launched an internal investigation in response to a customer’s complaint about tax forms and account records, the U.S. attorney said.
They found that Chon accessed BankAsiana’s computer systems using her credentials to make the transfers, he said.

She’d avoided detection to that point “by making false entries in the bank’s records and ensuring that funds she removed from CDs were transferred back into those accounts before they were set to reach maturity,” Fishman said.


Read the whole story here.

Tuesday, February 10, 2015

North Carolina Woman Accused Of Embezzling $148K From Medical Practice

From WNCN on 2/10/2015:

Authorities in Lincoln County accuse a woman of embezzling more than $148,000 from the medical practice where she worked as a bookkeeper for six years.

The Lincoln County Sheriff's Office says 50-year-old Donna Marie Varin of Catawba is charged with one felony count of embezzlement in excess of $100,000.

A statement from the sheriff's office says an investigation was launched in December after North State Medical Group in Denver reported that an employee had been embezzling money from the practice between 2007 and 2011.

Investigators discovered that cash receipts received would be turned over to Varin, who then made a bank deposit for less than what was taken in.

Varin was arrested last week and is free on a $30,000 bond. It's not known if she has an attorney.

North Carolina Man Charged With Embezzling $130K From Convenience Store

From the Carteret County News Times on 2/10/2015:

Police here arrested a town resident Monday and charged him with embezzling more than $130,000 from a Handy Mart where he was store manager.
John Joseph “JJ” Pavel, 26, is charged with felony embezzlement in excess of $100,000. He had his first appearance in district court in Beaufort on Tuesday and remains jailed under a $100,000 bond. His next court appearance is scheduled for Friday, March 6.
Newport Officer Michael Alberti, a detective, investigated the case. Corporate representatives of E. J. Pope & Son Inc of Mt. Olive contacted police Monday about the potential embezzlement at one of its Newport-based locations.
The company owns Handy Mart stores throughout Eastern North Carolina.
After being contacted by the company, Officer Alberti reviewed numerous records and transactions with corporate officials and determined that between July 2013 and January 2015, Mr. Pavel is suspected to have embezzled in excess of $130,000.
Mr. Pavel has been employed at the Newport Handy Mart for three years and was promoted to manager May 2012.

Kansas Man Sentenced For Embezzling $619K From Cleaning Equipment Company

From The Topeka Capital-Journal on 2/9/2015:

A Lawrence man was sentenced to two years in federal prison and ordered to pay $619,000 in restitution after pleading guilty to embezzling from a cleaning company that does business in Topeka and other parts of northeast Kansas, it was announced Monday.

According to Barry Grissom, U.S. Attorney for Kansas, Mark W. Elzea, 55, pleaded guilty to one count of interstate transportation of stolen funds.

In his plea, Elzea admitted the crime occurred while he was controller and part-owner of Pur-O-Zone, a janitorial and cleaning-equipment business based in Lawrence.

Grissom said Elzea started embezzling funds from Pur-O-Zone and his three business partners in 2004. The crime came to light in May 2014, after a vendor contacted one of the Pur-O-Zone partners about not receiving a check.

The partners then discovered numerous unauthorized checks signed by Elzea and made payable to Cardmember Service Chase Bank in Illinois.


Read the whole story here.

Mother Of New York Politician Pleads Guilty To Embezzling $197K From Non-Profit

From the New York Daily News on 2/9/2015:

Helene Heastie pleaded guilty to one count of second-degree grand larceny after her arrest for embezzling $197,000 from a nonprofit in the mid-1990s. The new speaker of the Assembly had remained silent about the incident until a statement issued Friday by his spokesman.

For newly anointed Assembly Speaker Carl Heastie, it was a painful moment about which he has remained silent: the arrest and conviction of his mother in the mid-1990s on charges of looting a taxpayer-funded nonprofit that was supposed to help the elderly and sick.

In his first public comments on this incident, Heastie (D-Bronx) addressed what he dubbed “a sad chapter” in his life in a statement issued Friday by his spokesman Michael Whyland in response to questions from the Daily News.

“The lessons imparted to the speaker over the course of a lifetime, including this painful and sad time for his family, included owning up to mistakes and taking responsibility,” Whyland stated.

In 1997 — three years before Heastie was first elected to the Assembly — his mother, Helene, was arrested by the Bronx district attorney and charged with embezzling $197,000 from a nonprofit called the Southeast Bronx Neighborhood Center.

The organization was funded entirely by tax dollars and was supposed to provide home health care to Medicare and Medicaid recipients. Helene Heastie was a high-level employee there for many years.

The DA charged she and a co-worker systematically raided the charity’s bank accounts to pay off credit card debt and make personal purchases. They used a rubber stamp of the charity’s board chairman, a local judge, to authorize checks, including for $5,877 worth of furniture for Helene Heastie's home in the Bronx.

When a co-worker at Southeast Bronx tipped off the chairman to the ruse, Helene Heastie and the co-worker were terminated in November 1995 and arrested in April 1997. On Friday, Whyland called the arrest “a sad chapter in the speaker’s life,” made worse by debilitating illnesses afflicting both his mother and father at the time.

Helene Heastie ultimately pleaded guilty to one count of second-degree grand larceny, a felony, and was sentenced to five years’ probation. She died soon after.

Whyland said Heastie believes the experience underscored the need to ensure nonprofits spend public dollars properly: “That is why Carl Heastie believed then, as he believes now, that every dollar provided to these organizations should be spent on serving those in need.”

Heastie is aware that this is a particularly sensitive issue for him, given the hundreds of thousands of public dollars he’s steered to nonprofits during his 14 years in Albany.

On Sunday, The News reported Heastie sponsored more than $600,000 for a Bronx nonprofit that had no official board, stopped filing tax returns while receiving some of that money, and went bankrupt. Heastie responded, “It was a group that did good work. We give the documentation, but it’s really up to the regulatory agencies to follow through on their paperwork. I didn’t have any involvement in the day-to-day operations. But I will say this, I would expect any organization that gets public funding should follow with the documentation.”


Read the whole story here.

Athletic Club Owners In Washington State Accused Of Embezzling More Than $500K From Workers

From the Washington State Attorney General's Office on 2/6/2015:

Washington State Attorney General Bob Ferguson has filed criminal charges in King County Superior Court against the owners and operators of West Seattle Athletic Club for stealing wages and evading taxes. In only the second wage theft criminal prosecution brought by the state, the Attorney General’s Office seeks justice for harmed workers and Washington taxpayers.

Defendants Sam Adams and Dana Sargent are alleged to have engaged in theft and fraud totaling over $500,000. The defendants allegedly failed to pay state taxes, withheld wages from workers, failed to pay workers’ insurance premiums, and failed to pay unemployment insurance.
The charging documents can be found here and here.

“Wage theft is a crime, and its victims are often among our most vulnerable residents. I won’t stand for violators who cheat working families out of their hard-earned wages,” said Attorney General Bob Ferguson. “My office will prosecute unscrupulous businesses that steal money out of the pockets of wage earners and taxpayers.”

Owned Two Athletic Clubs in Washington

According to the charging documents, the defendants owned and operated six athletic clubs, four in Oregon and two in Washington, between 2012 and 2014.

One Washington location, Lincoln Plaza Athletic Club LLC in Tacoma, closed in 2013 due to unpaid retail sales tax.

The other Washington location, West Seattle Athletic Club LLC, closed in 2013, after which West Seattle Club LLC opened at the same location. This operation closed in October 2014 after the landlord evicted the defendants for unpaid rent.

Allegations of Theft and Fraud

The AGO alleges the defendants:
  • Failed to pay the state approximately $446,000 in retail sales taxes that they collected for their Washington athletic clubs.
  • Failed to pay 11 employees wages they rightfully earned totaling $7,166.
  • Deducted insurance premium payments from employee paychecks, but failed to pay the insurance company, Aetna Healthcare. Aetna lost approximately $41,640 in unpaid medical and dental premiums, and workers were exposed to the risk of unpaid medical bills.
  • Failed to pay over $35,000 into state unemployment insurance.
Criminal Charges Filed, Restitution Sought

The AGO has charged Adams and Sargent with:
  • Five counts of Theft in the First Degree (Class B felony, 10-year maximum sentence);
  • Three counts of Theft in the Second Degree (Class C felony, 5-year maximum sentence);
  • Four counts of Filing a False or Fraudulent Tax Return (Class C felony, 5-year maximum sentence); and
  • Nine counts of Theft in the Third Degree (gross misdemeanor, 364-day maximum sentence).
Sentencing guidelines indicate a potential sentencing range for the charges of 43 to 57 months. The AGO has alleged that aggravating circumstances are present in this case, which could lead to an upward departure from that range.

The AGO is also seeking full restitution for all of the victims involved including the State of Washington, the individual employees, and Aetna Healthcare.

Arraignment is scheduled for Feb. 18, 2015 in King County Superior Court.

The charges contained in the charging documents are allegations only. A person is presumed innocent unless and until he or she is proven guilty beyond a reasonable doubt in a court of law.


Read the whole press release here.

Monday, February 9, 2015

California Woman Accused Of Embezzling $350K From Police Union

From CBS Los Angeles on 2/7/2015:

Authorities say the former officer manager of the Riverside Police Officers’ Association (RPOA) embezzled nearly $350,000 from the group spending the money on travel, car payments and child support.

In February 2012, RPOA board members discovered suspicious payments made on the association’s credit cards. A specific payment of $11,000 was made to the Orange County Department of Child Support Services in September 2011. The investigation revealed that a child support payment was made to Jamar Moore, 45, from Moreno Valley. Moore is the husband of RPOA’s former office manager Alis Archibeque, 42.

Archibeque was employed with the RPOA from April 2006 until about March 2012.

A line-by-line audit included over 7,000 items of alleged theft and unauthorized purchases made by Archibeque starting in about May 2007 and lasting almost five years. Her total amount of unauthorized charges added up to about $346,000, officials said.

A search warrant of Archibeque’s Moreno Valley home was conducted in November 2012 and several items purchased with the RPOA credit cards were allegedly located in the home.

RPOA President Brian Smith (who is also a Riverside officer) told KCAL9’s Laurie Perez the group was tipped off in early 2012 but that Archibeque gave a song and dance for months. He said one day she feigned a fainting spell and never returned.

Smith told Perez the group is “slightly embarrassed” but that it’s a lesson that theft can happen to anyone, even cops.

A complete investigation alleges Archibeque purchased personal groceries, gas, utility bills, concert tickets, jewelry, tattoos, car payments and home appliances with the RPOA credit cards. She is also accused of using RPOA credit cards while on trips to Italy and on Disney Cruise Lines.

Members of the Inland Regional Apprehension Team (IRAT) and RPD Economic Crimes Unit located and arrested Archibeque Saturday at a restaurant in Redlands.

She was booked at Riverside County Jail on two counts of grand theft and an enhancement for theft exceeding $100,000. Archibeque’s bail is set at $346,000.

People who may have additional information about this case are asked to call Detective Brian Money at (951) 353-7118.

Friday, February 6, 2015

Michigan Woman Sentenced For Embezzling $101K From Electrical Workers Union

From The National Legal and Policy Center on 2/5/2015:

Ann Marie Shaffer embezzled checks under the guise of processing them. She's now about to pay the price. On January 21, Shaffer, former dues clerk for International Brotherhood Electrical Workers (IBEW) Local 58, was sentenced in U.S. District Court for the Eastern District of Michigan to a year in prison for embezzling $101,059.56 in funds from the Detroit-based union. She also was ordered to serve two years of supervised release and pay $340,267.73 in restitution. Shaffer had pleaded guilty last August following a joint probe by the U.S. Labor Department's Office of Labor-Management Standards and Office of Inspector General.

Federal prosecutors had charged that Shaffer, now 57, a resident of Livonia, Mich., engaged in theft via a check substitution scheme. After receiving dues remittance checks from employers, she would set them aside without recording them. Then, when handling an equal amount of cash, she would replace the money with the unrecorded checks. "Union officials hold a position of trust, and will be held accountable when they cheat the workers they serve," said U.S. Attorney Barbara McQuade.

Iowa Man Expected To Plead Guilty Today To Charges He Embezzled $365K From Local Excavation Company

From The Gazette on 2/5/2015:

A former controller of a Dubuque excavating company will plead guilty Friday in federal court to embezzling over $360,000 from the company.

Michael Schute, who worked at Tschiggfrie Excavating from 1988 to 2013, will plead guilty to one count each of wire fraud and filing a false tax return, according to the plea agreement. Schute, who was responsible for the daily cash flow and had authority to write checks for the company, is accused of embezzling money from the company from 2008 to 2013.

According to the plea, Schute wrote company checks to pay for his personal credit card bills. He falsified ledgers to make it appear that the funds were used for company expenses to conceal his scheme.

Management at Tschiggfrie discovered the fraud in April 2013, after finding discrepancies in the expenditures reflected on the books, according to the plea. Schute confessed to the embezzlement during a phone conversation with one of the owners of Tschiggfrie. He was fired after the call.

Schute is accused of stealing about $365,417 over the five years, according to the plea agreement. During this same time period, he filed false tax returns because he failed to declare the money he embezzled. If Schute would have filed all taxable income, it would have resulted in additional taxes owed on about $86,347.

According to the plea agreement, Schute also will be required to pay full restitution to victims.
Schute faces up to 23 years in prison and up to a $500,000 in fines for both charges.

Upstate New York Woman Gets Probation For Embezzling At Least $225K From Doctor's Practice

From the Buffalo News on 2/4/2015:

Perhaps Dr. Frank R. Laurri should have fired Anne M. Fadel when a co-worker said he saw her pocketing a $50 bill from a patient’s payment in 2003.

Laurri told Niagara County Judge Sara Sheldon on Wednesday that he wanted to do so, but was talked out of it. “We were a family,” Laurri said. Eventually, the accuser resigned and the matter was ascribed to a personality conflict between him and Fadel.

Fadel, the office manager and “a trusted employee since 1997,” according to Laurri, stayed at his Lewiston medical practice until 2014, stealing all the way.

On Tuesday, Fadel, 65, was placed on five years’ probation for her guilty plea to second-degree grand larceny. Sheldon said it had been agreed that if Fadel repaid $225,000 by the sentencing date, she would not go to prison. But Laurri said he heard that for the first time Tuesday. He spent much of his time at the microphone arguing for a prison sentence. The maximum was five to 15 years, a sentence that Fadel would face if she violates any terms of probation.

“This type of person does not deserve a break from the court,” said Laurri, who was victimized along with his partner in the medical practice, Dr. Samuel R. Sirianni.

However, Sheldon said an agreement was made in her chambers that Fadel would not be jailed if she paid. Special prosecutor Gary M. Ertel, an Erie County assistant district attorney, said he thought Laurri had been told; Laurri said he wasn’t.

The sentencing commitment apparently was not placed on the record when Fadel was ordered Dec. 16 to pay the $225,000 by Wednesday, which she did.

Laurri said he was convinced that Fadel had stolen more than $500,000 since at least 2004, but bank records were destroyed after seven years, and the proof was lacking.

Laurri told Sheldon, “Even up to the bitter end, she tried to cheat us, working through her attorneys to hold our restitution hostage unless we made certain concessions.”

Fadel contended that “on a daily basis, there was a lot of verbal abuse from them, and I hung in, year after year.”
“It’s just simply untrue,” Laurri said after court. “There is no verbal abuse in our office.”

When asked why she stole the money, Fadel told the judge, “Apparently, in my small mind, I must have felt justified in doing it.”

Sheldon said, “Coming to the table today to face the court, she was laughing. It blew me away.”
Fadel, apologizing for the thefts, said, “I made a big mistake.”

“I wish you wouldn’t call it a mistake. It was a crime,” the judge said. She accused Fadel of being “disconnected” from the reality of the crime.

Several minutes later, as Fadel was sitting with defense attorney Dominic Saraceno, reviewing the probation rules, Sheldon interrupted another case to say, “There you are, giggling away. It’s just preposterous. You really need counseling.”

Mental health counseling is one condition of the probation. Also, Fadel must serve 10 days in the county work program and perform 500 hours of community service.

Fadel wouldn’t tell a why she stole the money, but defense attorney Alan J. Roscetti said, “It was a $100-a-week gambling habit at the Seneca Niagara Casino.”

Laurri said Fadel drove a Cadillac Escalade and bragged about her designer shoes and purses. “This person is a repeat offender in the strictest sense. She stole day after day after day for years.”

Thursday, February 5, 2015

New Jersey Man Pleads Guilty To Embezzling $512K

From the North Jersey Media Group on 2/5/2015:

A Clifton man faces a possible seven years in prison after admitting Thursday that he embezzled more than $500,000 from a Clifton pharmaceutical importer.

Steven Dilk, 60, of Clifton, a former warehouse supervisor and operations manager for SST Corp., entered a guilty plea to a charge of second-degree theft by deception before Superior Court Judge Randal C. Chiocca in Passaic County. Under a plea deal, the state will recommend seven years in state prison at sentencing, which is scheduled for April 17. Dilk will be required to pay full restitution.

According to Acting Attorney General John J. Hoffman, Dilk's thefts occurred between January 2006 and April 2013, when Dilk left SST to work for a competitor.

Hoffman said Dilk defrauded SST by getting reimbursed for import fees he never paid. Before 2006, SST had its products shipped through John F. Kennedy International Airport in New York, where it sometimes faced "gate charges" that would be paid by Dilk, who would then be reimbursed by the company.

But after 2005, SST received its shipments through Philadelphia International Airport, where it hired a shipping broker that paid any fees. Although Dilk did not incur any expenses for shipments through Philadelphia, he submitted numerous false receipts to SST for "gate charges" that he claimed to have paid. As a result, he fraudulently received reimbursement totaling $512,047, authorities said.

Utah Woman Pleads Guilty To Embezzling Nearly $300K From Bank

From the Salt Lake Tribune on 2/5/2015:

A former loan officer has been ordered to repay Wells Fargo Bank $297,000 that she admitted embezzling.
Christal Mawson is required to pay a minimum of $200 a month and no interest, based on an analysis of her ability to pay.
A felony charge of embezzlement by a bank employee was filed against her in December of 2013 in U.S. District Court. She pleaded guilty in October of last year, admitting that she embezzled from a Wells Fargo branch in Salt Lake City from February of 2008 to January of 2013.
In lieu of prison, Mawson was placed on probation for five years.

Connecticut Man Pleads Guilty To Charges He Embezzled $150K From Connecticut Canine Search and Rescue Organization

From WTNH News8 on 2/4/2015:

A United States Attorney for the District of Connecticut, announced that Thomas Recck, of New Britain, waived his right to indictment and pled guilty today before U.S. District Judge Jeffrey Alker Meyer in Bridgeport to fraud and tax charges stemming from an embezzlement scheme.

According to court documents and statements made in court, Recck was the Treasurer for Connecticut Canine Search and Rescue, Inc. (“CCSAR”) in Kensington, a volunteer-based nonprofit organization dedicated to the search and rescue of missing and lost persons in the United States by using trained search and rescue dogs. In his capacity as the treasurer, Recck had access to the bank accounts of CCSAR. From approximately Jan. 2008 to Aug. 2012, RECCK transferred $150,329.57 from CCCSR accounts into a separate account that he controlled and used the funds to gamble and other personal expenses.

Recck also failed to report the stolen funds on his federal tax returns.

Recck pled guilty to one count of wire fraud, which carries a maximum term of imprisonment of 20 years, and one count of filing a false tax return, which carries a maximum term of imprisonment of three years. Judge Meyer scheduled sentencing for April 29, 2015. Recck also has agreed to full restitution, as well as back taxes, penalties and interest for the 2008 through 2012 tax years.

Following his guilty plea, Recck was released on bond.

West Virginia Man Indicted For Allegedly Embezzling $833K From Trust Funds

From the Register-Herald on 2/4/2015:

Among the 35 people who were identified as having been indicted by a Greenbrier County Grand Jury this week is a man accused of embezzling more than $800,000 from a trust fund.

Jeffrey Einer Lewis, 58, of Renick was indicted on two charges — embezzlement by a fiduciary and financial exploitation of an elderly person.

The indictment charges that Lewis, a certified public accountant (CPA), embezzled a total of at least $832,992.65 from a trust established by the late John R. Dawkins for the benefit of John Kay Dawkins. The alleged embezzlement occurred between Aug. 1, 2010, and March 31, 2014, while Lewis was acting in the capacity of trustee of the Dawkins trust.
That same alleged embezzlement is also at the heart of the second count of the indictment, in which Lewis is charged with intentionally misappropriating or misusing at least $1,000 from the trust between June 10, 2011, and March 31, 2014, during which time the trust's beneficiary was 65 years of age or older.
Lewis was arrested on those charges in May of last year. He was released from custody after posting a $75,000 bond.
On May 29, a Greenbrier Circuit judge signed an order agreed to by all parties removing Lewis from the trusteeship and appointing Lewisburg attorney Edward D. Knight III as the successor trustee.
Including the two-count indictment against Lewis, the grand jury — which met on Tuesday and Wednesday this week — returned a total of 38 indictments, two of which were ordered sealed.


Read the whole story here.

California Woman Receives Suspended Sentence After Embezzling Nearly $150K From Mobile Home Park

From KESQ CBS Ch.3 on 2/4/2015:

An Indio woman won't see any jail time after pleading guilty to embezzling nearly $150,000 from the mobile park where she worked.

A judge sentenced 51-year old Christina Jo Cruz to nearly 15 years in prison and then suspended the sentence, giving Cruz probation.

Cruz pleaded guilty to embezzling over $100.000 from the Happy Wanderer Community Association in Indio.

The judge suspended the sentence because of what he called special circumstances, including Cruz's age and the fact that she cares for 2 special needs relatives.

Indiana Woman Charged With Embezzling $600K From Step Father

From WTHI TV10 on 2/4/2015:

A Gibson County woman is behind bars, accused of embezzling over $600,000 from her step-father.

On Wednesday police arrested 66-year-old Brenda Lee, from Fort Branch after an investigation dating back to December, 2013.
According to police, they received information money was missing from her step-father, Franklin Douglas’ account.
Douglas died in September of 2012.
Lee was Douglas’ Power of Attorney, giving her full access to his bank accounts.
During the investigation, police learned Lee had allegedly embezzled over $600,000 for her personal use from Douglas’ bank accounts.
On Wednesday, the Gibson County Prosecutor’s Office issued a felony arrest warrant for Lee.
Lee was charged with theft and check deception.

Wednesday, February 4, 2015

Long Island Man Suspected Of Embezzling As Much As $10 Million From Local HVAC Company Apparently Commits Suicide

From the Riverhead News-Review on 2/4/2015:

Riverhead Police said a man under house arrest for allegedly embezzling over $10 million from his family’s West Babylon business was found dead in his house Wednesday morning in an apparent suicide.

Riverhead Police said in a statement that around 9:30 a.m., police and Riverhead Volunteer Ambulance Corps were called to the scene of the house, located at Kerry Court. A subsequent investigation identified Mr. Simonelli, 55, as the deceased.

Chief David Hegermiller said Wednesday morning he did not believe there were any signs of foul play related to the death and detectives later said the deceased was believed to have committed suicide.

Suffolk County Medical Examiner’s Office arrived on scene at the Kerry Court house around noon on Wednesday.

The property is listed as belonging to Mr. Simonelli, the man previously accused of stealing $10 million from his family’s HVAC company.

Mr. Simonelli was released under house arrest on $750,000 bond last December.
Calls to both Mr. Simonelli’s lawyer and the lawyer of his family’s company were not immediately returned.

Original story from the Riverhead News-Review on 11/13/2014:

A Calverton man is being held without bail in a Nassau County jail after he was arrested by FBI agents Wednesday on charges he stole upwards of $10 million from his family-run heating and air-conditioning company in West Babylon.

Joseph Simonelli, who lives in Calverton and owns a thoroughbred horse farm on Mill Road that’s run by his stepdaughter, is facing up to 14 years in prison for conspiracy to commit mail fraud, according to court records and a criminal complaint filed in Eastern District court.

Mr. Simonelli was arraigned Wednesday in Central Islip and ordered held without bail, with a federal judge determining he was a threat to the community over allegations he had threatened to shoot his sister, who is also a business partner, said Joseph Conway of Mineola, an attorney for the family’s HVAC company, FW Sims, Inc.

The profitable and prominent contractor has done work at 1 World Trade Center and Yankee Stadium, Mr. Conway said.

Both Mr. Conway and the criminal complaint described an embezzlement scheme dating “as far back as 2008″ that involved false billings issued to FW Sims, Inc. from fictitious companies.

Mr. Simonelli, an executive vice president and director for the company, would allegedly issue the false payments, direct the money to his own bank accounts and elsewhere and provide a 5 to 10 percent kickback to co-conspirators.

No other arrests were made in the case, though Mr. Conway said prosecutors are still investigating.

Virginia Woman Sentenced For Embezzling $120K From Navy Seal Charity

From FOX TV8 on 2/3/2015:

VIRGINIA BEACH, Va. — The wife of a Navy Special Warfare sailor was sentenced to prison for embezzling money from a Navy SEAL charity.

Tammy Mason admitted she stole more than $120,000 from a charity that helps wounded SEALs and their families, and far too often, SEAL widows and the children left behind.

Mason is accused of spending the money on everything from luxury trips to child care.

The sentencing guidelines called for no jail time, but a circuit-court judge sent her straight to prison.

Just before this, she heard from the top executive of the Navy SEAL Foundation, a charity that’s sole purpose is to help SEAL families in their darkest times.

Mason worked part-time at the charity and, according to the prosecutor, turned the foundation’s account into her own personal slush fund.

Michigan Woman Pleads Guilty To Embezzling $872K From Local Hotel

From the Grand Rapids Business Journal on 2/3/2015:

A former hotel employee has pled guilty to stealing more than $800,000 from her employer over several years.

Renata Nicole Annese of Jenison pled guilty last week in the U.S. District Court for the Western District of Michigan to one count of wire fraud while working at the Sleep Inn in Allendale, according to Grand Rapids-based U.S. Attorney General Patrick Miles, Jr. last week.

Guilty plea

Annese agreed to pay restitution of approximately $872,000 and forfeit her equity interest in her personal residence in Jenison, because she used the fraud to make her mortgage payments.
She will be sentenced on May 18, when she will face up to 20 years imprisonment and a fine of up to $250,000.

Committing fraud

Annese repeatedly used the Internet to siphon funds intended for her employer and divert them illegally to her own bank accounts.

From October 2006 until April 2013, Annese used interstate wires to defraud the former owner of the Sleep Inn of nearly a million dollars.

She did this by regularly accessing the Internet, so that she could edit data related to the hotel’s credit card sales. Annese inserted her own personal credit card and bank debit card numbers on the payment side of many of those transactions.

This caused the hotel customers’ cards to be charged, but directed the customers’ banks to send the payments to Annese’s credit and debit cards, instead of to the hotel’s bank account.

Annese concealed her fraud by pairing her credit and bank debit card numbers with names and charge amounts actually associated with real hotel customers. This made it appear as if those customers were receiving a credit back to their cards, when in reality Annese was receiving the payments.

Impact on hotel owner

The former owner of the Sleep Inn sold the hotel in 2013, because of its struggling financial performance and did not learn of Annese’s fraud until shortly after the sale.

“The repeated use of interstate wire transmissions to steal nearly a million dollars and to contribute to this victim’s decision that he had to sell his business makes this case especially appropriate for federal prosecution,” Miles said.


Read the whole story here.