Maryland Woman Awaiting Sentencing After Pleading Guilty to Embezzling $250,000

As one of its top stories for 2007, the Carroll County Times, a Maryland newspaper, cited the case of Karen Ann Malinowski, a Maryland woman who is awaiting sentencing after pleading guilty in July to embezzling nearly $250,000 from an elderly resident, Lois Hundertmark, to whom she was providing care.

Malinowski was the third person in Carollo County to be charged with embezzlement in the last two years. Malinowski had been stealing from Hundertmark for more than four years, even after Hundertmark died in 2006. Hundertmark's son alerted authorities to the theft after he noticed the loss of funds.

See the full story here.

Chicago Man Accused of Embezzling $3 Million from American Airlines

The FBI announced earlier this month that Gary M. Aumann, a manager for American Airlines at O'Hare International Airport, was charged with embezzling more than $3 million from the airline to fund a lavish lifestyle that included the purchase of numerous vehicles, riverfront property in Missouri, a 35-foot yacht, and monthly payments to a dancer.

The scheme involved the diversion by Aumann of more than $3 million in "business" toward companies owned by co-defendant Donald Down even though Down's companies, A & D Supplies and Addison Business Supplies, did no work for American. The two simply split the proceeds, according to the charges.

See the full story here.

Maine Official To Spend 15 Months in Prison for Embezzlement

A 65-year-old former town official in Maine who embezzled more than $46,000 from the town over 10 years will be spending 15 months behind bars after pleading guilty on Friday.

See full story here.

Former Bank manager sentenced for embezzlement

Samuel Scherch, a former assistant vice president at Fifth Third Bank, pleaded guilty recently to one count of embezzlement and one count of filing a false income tax return. He must repay $1.5 million to the bank and $500,000 to the IRS.

See the further details here.

Iowa Woman Accused of Embezzling Over $600,000

An Iowa woman has been charged with stealing more than $629,000 from Title Services Corporation by allegedly transferring money from the business's trust account to three personal bank accounts.

See the news report here.

Former Attorney Arrested for Alleged Embezzlement

Steven Krell, 58,  an attorney who formerly managed trust accounts was arrested recently on charges that he embezzled nearly $1.4 million from two clients, including a woman, 90, who suffered from dementia. If convicted, he faces more than six years in state prison.

See further details here.

Defendants to Plead Guilty in $6.4 Million Nestle Embezzlement Case

Two Pennsylvania men, Henry Machinski and Vincent Marchese, will each plead guilty to four felony charges in connection with embezzling $6.4 million from food giant Nestle USA. The U.S. Attorney said the plea agreement calls for the defendants to serve five to six years in prison.

Prosecutors said Machinski, then a sales manager for Nestle USA, created false invoices from an "A&P" grocery store and sent them to Nestle in Glendale, Calif. Marchese, who had no connection to the real A&P grocery chain, deposited the payments from Nestle in a bank account he set up in the name of "AP," according to prosecutors. The scheme netted $6.4 million between September 2001 through June 2005, when Nestle's auditors discovered it.

Marchese's lawyer said his client had a gambling problem that led him to commit the crime.

See the full story here.

Former accountant sentenced to 14 years for $10.8 million embezzlement

A former accountant, Denis Shusterman, accused of embezzling $10.8 million from a businessman to bankroll a lavish lifestyle was sentenced to 14 years in prison. The money was primarily stolen from Kimber Manufacturing, a Yonkers, N.Y., firearms company at which Shusterman worked as the chief financial officer.

See the full story here.

Former University President Charged With Misuse of School's Funds Blocked From Teaching Accounting

The White Collar Crime Prof blog posted earlier this week about the interesting case of former Texas Southern University president Priscilla Slade who faces criminal charges against her arising from alleged misuse of University funds for her personal expenses.  Slade was fired as president earlier in 2006 because of the alleged financial improprieties, but retained her tenured position as a professor of accounting and was scheduled to teach courses this term.  The resulting uproar led the acting president to block Slade from teaching the courses, and to place her on paid leave while a committee reviews whether to strip her of tenure and remove her from the faculty.

U.S. Attorney to Appeal Sentence of Former WalMart Exec Tom Coughlin

In the ongoing saga of Walmart executive Tom Coughlin, we only recently reported that Couglin was sentenced to home confinement after pleading guilty to charges that he defrauded the company by submitting fake invoices. 

The latest update, reported yesterday by the White Collar Crime Prof (WCCP) blog (see here), is an announcement by the U.S. Attorney's Office for the Western District of Arkansas that it will appeal the sentence.  According to the WCCP blog, while the Federal Sentencing Guidelines called for a sentence in the 24-30 month range, U.S. District Judge Robert Dawson sentenced Coughlin to 27 months of home confinement based on his findings that Coughlin's serious health issues warranted home confinement, and that his charitable works and the effect of his guilty plea on his standing in the community, among other things, were sufficient punishment and that a prison term was not necessary to fulfill the goals of sentencing.

Teller Pleads Guilty to Embezzling Coins

Linda Fossum, a former head vault teller at a Wisconsin branch of U.S. Bank, pleaded guilty recently to embezzling about $40,000 in coins over seven years.

See the full story here.

Former Staples executive charged with embezzlement

A former Staples vice president has been charged with embezzling more than $550,00 from the company in connection with the submission of fraudulent invoices and improper use of corporate American Express cards to charge personal expenses.

See the full story here.

Embezzler Free on Bail Posted by His Wife and...Mistress

The Wall Street Journal Law blog had an amusing post today about Yoshio Yamaki, a Japanese businessman who has been charged with embezzling more than $7 million from camera company Sigma USA.  Yamaki walked out of the federal courthouse in Brooklyn after two women - who identified themselves to the judge as Yamaki's wife and mistress, respectively - posted a $350,000 bond.  The judge's reaction: "Mr. Yamaki, I just want to say you’re an incredibly lucky man."

Yonkers bookkeeper pleads guilty to embezzlement

Wayne Diecchio, a bookkeeper from Yonkers pleaded guilty recently to embezzling more than $76,000 over a 5 1/2-year period from a temporary employment agency.  Diecchio stole the money by making numerous unauthorized ATM withdrawals, writing unearned petty cash and payroll checks to himself, and paying his personal credit card debts through electronic transfers from company funds. According to a statement from the District Attorney, Diecchio's thefts caused the company to go out of business.

See the full story here.

Former brokerage CEO indicted for embezzlement scheme

The former chief executive officer of DreamLife Financial (a financial services business based in California), Tony Daniloo, was indicted last Thursday in connection with a scheme to defraud homeowners of $7 million.  Federal prosecutors say that Daniloo embezzled money from real estate clients by altering client's escrow documents and depositing large amounts of their cash into his personal accounts.

See the full story here.

Bookkeeper Embezzles $2.3 Million to Buy Lottery Tickets

The White Collar Crime Prof Blog recently shared the story of Annie Donnelly who entered a guilty plea to embezzling $2.3 million from her employer, a medical practice, to buy lottery tickets over the past three years.  WCCPB reports that Donnelly was buying upwards of $6,000 worth of tickets a day, but questions why she even bothered when stealing $2.3 million without being noticed is pretty much the same thing as winning the lottery??!! : - )

See the WCCPB post here.

Prominent Nevada Lawyer sentenced in Casino embezzlement case

We've been covering the embezzlement case of casino lawyer Richard Davenport; see most recent post here. 

Last Thursday, Davenport, who admitted to embezzling $3.1 million from John Ascuaga's Nugget casino over a 12 year period, was sentenced to 10 years in prison, with parole possible after serving four.

Before sentencing, Davenport apologized to the Ascuaga family for "a betrayal that cuts deep." 

See the full story here.

Former District School Manager Sentenced for Embezzlement

The former business manager of a school district in Idaho who admitted to embezzling hundreds of thousands of dollars from district accounts, was sentenced on Monday.

See the full story here. 

Former Harris Bank vp charged with embezzling $14 Million

A former assistant vice president for Harris Bank in Chicago has been charged with embezzling $14 million from the institution over six years. The money was used to buy property in Chicago and Florida.

See the full story here.

Former Wachovia Bank vice president sentenced in $640,000 embezzlement

Francis Myers, a former bank vice president at Wachovia Bank, was recently sentenced to three to six years in prison after pleading guilty to embezzling more than $640,000 from the accounts of four elderly customers.

Prosecutors said Myers made more than 200 unauthorized transfers and withdrawals from 18 accounts owned by the four customers between April 2001 and August of last year.  The money was used to pay for weddings, college tuition, and a Michigan vacation home, and to finance a failing Philadelphia business and a loan for a mobile home.

See full story here.

Former Housing Authority manager admits embezzling $111,083

The former accounting manager at the Hoboken Housing Authority, Eric Hurt, pleaded guilty Wednesday to embezzling $111,083 from the agency by writing checks to himself, federal prosecutors said. The defendant admitted he wrote 34 such checks from August 2001 to February 2004, and concealed the theft by falsely reporting that the checks were to various vendors.

See full story here on Newsday.com.

The White Collar Crime Prof Blog has chimed in with a tongue-in-cheek post that observes that the Hurt case makes "[e]mbezzlement . . . sometimes [seem] as easy as opening up a can of beer on a hot summer day." It argues the embezzlement here clearly resulted from a total failure of internal controls.

former consultant to the Roman Catholic Archdiocese of New York admits to embezzlement scheme

Joseph DeRusso, of Florham Park, New York, a former consultant to the Roman Catholic Archdiocese of New York recently admitted in federal court that he participated in a plot to divert $1 million in funds meant for food programs for parochial school children. DeRusso also pleaded guilty to taking more than $1.2 million in kickbacks from vendors doing business with the church. Under the terms of a plea agreement, he is likely to spend up to six years in prison after his sentencing in November.

See further details here.

Former Wal-Mart Executive Sentenced to Home Confinement for Embezzlement

We reported in a post in January that former Wal-Mart vice chairman Thomas M. Coughlin had agreed to plead guilty to five counts of wire fraud and one count of tax evasion in connection with his use of company money to pay for personal expenses. 

The White Collar Crime Prof Blog reported in a post last week that Coughlin was sentenced to a 27-month term of home confinement. According to the blog, although the Sentencing Guidelines called for a prison term of over two years, and prosecutors recommended six to twelve months in prison, U.S. District Judge Robert Dawson accepted the testimony from Coughlin's doctor that various illnesses made him too fragile to serve a prison term because he was "57 going on 87." 

See further details about the sentencing in a Reuters news release here.

Former Company Owner Pleads Guilty to Embezzlement

The former owner of a now bankrupt Tulsa company is pleading guilty to charges of embezzling more than $24,000 that was intended for his employees' 401-k plan.

See full story here.

Los Angeles Attorney Arrested For Alleged Embezzlement

An attorney accused of embezzling more than $300,000 from a half-dozen clients, including a woman with breast cancer, was arrested Tuesday on a felony warrant, prosecutors said.  The charges stem from Wolf allegedly depositing settlement checks from personal injury, workers' compensation and wrongful termination lawsuits into his clients' trust accounts, then embezzling from those accounts.

See full story here.

Former Bank Teller Sentenced In Embezzlement Case

A Baltimore-area woman was sentenced to two years in prison after pleading guilty in November to the embezzlement of about $250,000 from a Wachovia bank

See the full story here.

Massachusetts Man Gets 2 Years for Embezzlement

It was reported last week that a Massachusetts man who stole $100,000 from the Greylock Electric Company over a four-year period will receive a two and a-half year jail sentence after pleading guilty. The company is owned by the defendant's parents.  See full story here.

Iowa Woman Sentenced to 3 Years for Embezzling $637,000

An Iowa woman charged with federal health care fraud was sentenced to more than three years in prison for embezzling more than $637,000 from non-profit Systems Unlimited where she worked as the financial manager. According to the grand jury indictment, the woman issued checks on System Unlimited’s business account to cover her credit card bills between 1994 and April 2003. She also wrote checks to different people and fictional organizations.

See the full story here.

South Carolina Woman sentenced to six years in prison for embezzlement

A North Carolina woman has been sentenced to six years in prison after pleading guilty to embezzling nearly $540,000 from her employer, The Service Company (TSC), pursuant to a scheme by which she took checks payable to TSC and deposited them into another account she controlled.  The owner of TSC indicated that the crime had devastated his company and its employees.

See the full story here.

Former Patterson-UTI Energy CFO's Assets Up for Sale

We've posted regularly on the $77 million embezzlement perpetrated at Patterson UTI Energy, Inc., to which former CFO Jody Nelson pled guilty in April 2006 (see post here). The White Collar Crime Prof Blog reported last week that an effort is now underway to recover at least some of the losses caused by Nelson's fraud by auctioning off virtually everything he owned ranging from a Dirt Devil vacuum cleaner (stuffed with dollar bills???) to an autographed 2004 Boston Red Sox jersey.

See further details here.

Lawyer Sues Bookkeeper for Embezzlement

New Hampshire lawyer Thomas Gage filed suit against former bookkeeper Deborah Woods on charges of allegedly embezzling funds. Gage says he discovered the embezzlement as he was preparing to distribute more than $600,000 left in the will of Grace C. Fogg (who died at the age of 104).

See the full story here.

Second-ranking financial officer in the Presbyterian Church Admits to Embezzlement

Judy A. Golliher, the second-ranking financial officer in the Presbyterian Church (U.S.A.), was fired last week after she admitted to embezzlement. More than $100,000 in church funds is missing.  Church officials said in a statement issued on Thursday that the case is being turned over to prosecutors. They said insurance and restitution should cover any losses.

See the full story here.

California Investor Investor charged with defrauding clients of $17.5 million

A California-based real estate investor charged today with defrauding clients of $17.5 million faces 103 felony charges including theft, embezzlement and forgery for allegedly phony transactions from 1995 to 2005 .

See full story here.

City worker arrested on embezzlement charge for alleged "lapping" scheme

A former California city worker was jailed last week on an embezzlement charge after she allegedly used a "lapping" scheme to embezzle $77,000 in city funds.  Under the scheme, the defendant took cash from one account's deposit and used a check to be deposited in another account to cover the amount taken.

See the full story here.

Ex-CFO for toy company sentenced for embezzlement

The former chief financial officer Timeless Toys, Inc., was sentenced Tuesday in San Jose to 34 months in prison for embezzling $1 million from the company. According to evidence submitted to the court, Lawrence Teodoro used his position as CFO to set up a secret account that he used for outside business ventures and personal expenses that included purchases from "high-end jewelers and clothiers, fancy hotels and spas, boutique wine shops, Hawaiian vacations and escort services."

Read the full story here.

Compulsive Shopper Sentenced for Embezzling More Than $1.5 Million

A woman accused of embezzling more than $1.5 million from a credit union and buying more than 1,500 items has been sentenced to 27 months in prison. The embezzled funds were used to purchase, among other things, hundreds of pairs of shoes, a $60,000 swimming pool, 58 coats, 16 chain saws, a $25,000 John Deere tractor and more than 3,000 books. The defendant has already begun working to pay back the money she stole by selling her purchases on e-Bay. She's sold 1,000 items so far, bringing in $60,000, according to her attorney.

Read the full story here.

Former Teller Enters Embezzlement Plea

A former bank teller, Astrid Warnock, is expected to plead guilty to embezzling more than a million dollars from Trustmark National Bank.  Warnock was head teller and worked for the bank more than 20 years before her arrest.  See the story here.

Former finance manager sentenced to 17 months for embezzlement

The former finance manager and controller of a Sacramento medical group has been sentenced to 17 months in federal prison for embezzling more than $388,000, prosecutors said last Friday. See the full story here.

Lottery Ticket Embezzlement

Debbie Sue West, 47, of Alva, Oklahoma, was charged on seven counts of embezzlement in connection with lottery tickets issued at the B-YZ Tavern in Cherokee, Oklahoma where West worked.  See the full story here.

Woman Pleads Guilty in $1 Million Embezzlement Case

A Utica woman has been charged with embezzling more than $1 million from a bank she worked for.  See story here.

Former Employee of the Year Accused of Embezzlement

In a news story that illustrates the shock that often accompanies disclosure of possible embezzlement by a trusted employee, KRCA-3, a TV station based in Sacramento, California, reported that 42-year-old Ernest Shih, who was the "2005 City Employee of the Year" in Auburn, Californa, made his first court appearance last Friday since his arrest on embezzlement charges. Authorities allege that Shih cheated the city out of thousands of dollars by receiving double reimbursements for items purchased for the city. See the news report here.

Vermont woman sentenced for embezzlement

A former executive, Stephanie Gardner, with the Law Centers for Consumer Protection in Bennington, Vermont was sentenced Wednesday to time served on a federal charge in connection with the embezzlement of $85,000 from the firm after Gardner pleaded guilty. Among other things, Gardner used nearly $30,000 of the Center's money to buy a 2001 Chrysler Sebring.

Gardner has cooperated with federal and state authorities and disclosed massive misuse of client money at the Law Centers.

See the full article here.

Bethel pols vow changes in fallout from $500G embezzlement

After Forrest Finlay-Rabchuk, former secretary/treasurer of the Bethel, Pennsylvania township was arrested and charged with embezzling more than $500,000 of township funds, supervisors chairman Michael George reassured residents about new checks and balances to help safeguard the township's funds. These changes include requiring multiple signatures  on checks, and if payment is generated or requested by any department within the township, the manager of said department will be responsible for signing off on the payment. See the full story here.

Former School District IT Director Indicted for Embezzling Federal Funds

The White Collar Crime Prof blog reported last week that a former school district official in South Carolina was indicted on twelve counts of mail and wire fraud related to embezzling funds from the federal government through the E-Rate program, which provides funds to disadvantaged school districts to pay for communications networks and internet access for students and teachers.  See the full post here, including a link to the Department of Justice press release.

City Treasurer Charged With Embezzling Almost $600,000

Carolyn Austin, 45, of De Pere, Wisconsin, a former city treasurer, was charged with five counts of felony theft and one count of misconduct in public office for allegedly embezzling almost $600,000 from city accounts. According to the charges, city employees were paid either with a negotiable check or by direct deposit. Austin, who handled the payroll, manipulated the accounts of those receiving checks by creating a duplicate direct deposit in the same amount that was then deposited into one of four accounts she created for herself.  See the full story here.

Taking gifts rampant at radio station

Three former employees of a Michigan radio station have been charged with embezzlement for in-kind trade deals under which sponsors received favorable on-air mentions reportedly worth tens of thousands of dollars in exchange for gifts such as meals, pool tables, golf memberships, Persian rugs, furniture, event tickets and spa services. See the full story here.

Escape plan fizzles for embezzlement suspect

A man accused of embezzling more than $600,000 in early March paid two accomplices $20,000 each to help him go into hiding, according to court documents. The man, Scott Kirby, worked for an armored car service that transferred money from local businesses to banks. One of the accomplices told investigators that he and a friend drove Kirby to a hotel room the day after Kirby allegedly stole the money from the armored car service, and planned to tell authorities Kirby left for Mexico. See full story here.

Former Nugget lawyer Richard Davenport pleads to $3 million embezzlement

We've been reporting on the embezzlement case of Nuggest casino lawyer Richard Davenport - see posts here and here. The latest is that Davenport has pleaded guilty to embezzling more than three million dollars from the Nuggest hotel-casino company between 1992 and 2005 and faces up to 20 years in prison. See the full story here.

School Recovers $50K of Embezzled Funds

A piece of good news: A Mississippi school recovered $50,000 from the state through a bonding company that had insured the former principal who embezzled funds from the school. See the full story here.

Charity exec pleads guilty to embezzling money to pay dominatrix

A charity foundation's former accountant, accused of embezzling heart disease research funds to pay a dominatrix to beat him, pleaded guilty earlier this week to grand larceny and admitted he stole more than $237,000.  See the full story here and a post on the story in the White Collar Crime Prof Blog here.

Former 49ers kicker Wersching pleads not guilty to embezzlement charges

We reported on the indictment of former San Francisco 49er kicker Ray Wersching for embezzlement here. Today it was reported here that Wersching pleaded not guilty to the charges and is free on bail.

Patterson-UTI Energy Embezzlement Case Update

In the latest news on the Patterson-UTI Energy embezzlement trial of former CFO John Nelson, the company indicated on Friday that an investigation by its audit committee confirmed that no other employees knowingly participated in Nelson's alleged $69 million embezzlement. See the full story here.

This news report adds that Nelson's wife Hillary has agreed to give up $4.2 million in a Morgan Stanley account, plus a home in Dallas, a 2005 Lexus, jewelry, furniture and several other items. Hillary will be able to keep various items including: furniture, children's toys, some jewelry, a 401k account, and $104,000 in cash.

Attorney Pleads Not Guilty To Embezzlement

An attorney pleaded not guilty to four felony charges Friday of embezzling $150,000 from a trust he managed for a woman who once worked as Walt Disney’s secretary, Alicia Waters.  We've reported on instances of alleged embezzlement by attorneys in some recent posts; for instance, see here and here. See the latest news report here.

School District Pleads for Higher Restitution Payment from Embezzler

Richard Zaranek of Grosse Pointe, Michigan, former principal of Cherokee Middle School in Clinton Township, was recently sentenced to 31 months in a federal prison for embezzling funds from his school district, and ordered to pay restitution of just over $399,000. The superintendent of the victimized school district asked the judge to consider making Zaranek pay the full amount of the $641,242.73 he allegedly embezzled as well as pay legal, consulting and audit fees the district paid as a result of the theft.  If the final restitution ruling is not satisfactory, the district says it may file a civil suit to recover additional sums. See the full story here.

Questions arise over judge selection in Nugget embezzlement case

We reported in a post yesterday that prominent Reno attorney Richard Davenport had been arrested on suspicion of embezzling more than $3 million from the Sparks hotel-casino. The Reno Gazette Journal reported Sunday that the process for picking the judge who will decide whether Davenport goes to prison or gets probation is being criticized by some who say the standard procedure should have been followed to avoid any question of impropriety.

The article reports that instead of allowing the case to be randomly assigned by the court clerk -- the standard practice -- Washoe District Chief Judge Jerry Polaha passed over a list of judges and sent the case directly to recently retired and now senior judge Peter Breen. The District Attorney handling the case indicated that he requested the departure from standard procedure due to concerns that several judges in the district had prior relationships with Davenport (a well known Reno attorney) that could raise conflict of interest issues. Chief Judge Polaha also indicated that the assignment process was handled differently due to concerns about conflicts.

However, Judge Brent Adams, another judge in the district, opined that "the process of selecting the judge should be uniform in all criminal cases." He explained that the way the process normally works is that the accused is charged, has a preliminary hearing or waives the hearing, and then the case is sent to the district court, where a clerk randomly assigns it to a judge in one of eight departments. If a judge has a conflict on interest with the case, he or she will step down and the case will return to the clerk for another random assignment. That process continues until all parties are in agreement.

Judge Adams expressed concern that Chief Judge Polaha had apparently preempted that process, which was unprecedented.

Davenport's attorney also expressed concern about the prosecuting attorney talking to the judge about case assignment without defense counsel present. But ultimately, Davenport's attorney said he was satisfied with having Judge Breen handle the case.

Read the full story here.

Former Nugget lawyer arrested on embezzlement charges

Another embezzlement story involving a lawyer. Richard Lee Davenport, who worked as general counsel for the Nugget casino resort for 15 years, has been arrested on suspicion of embezzling more than three million-dollars from the Sparks hotel-casino. See the full story here.

Ex-Gold Banc chairman pleads guilty to embezzlement

Former Gold Banc Corp. Chairman Michael Gullion pleaded guilty Monday in U.S. District Court in Topeka to two counts of embezzling from the bank. Gullion faces a maximum penalty of 30 years in federal prison and a fine of as much as $1 million on each count. Gullion's theft involved depositing checks payable to the bank into his own personal account. See the full story here in the Kansas City Business Journal online.

Lawyer Jailed Over Embezzlement Scheme

The Wall Street Journal Law Blog by Peter Lattman reports that a Virginia lawyer, Robert Short, who embezzled nearly $500,000 from his law firm and his clients, was sentenced to four months in prison after pleading guilty in New Jersey. Short used the funds for gambling. Aside from his prison sentence, Short was ordered to pay restitution at a rate of $50/month, which means, according to the Journal's calculation, that it will take Short 4,539 years to make the law firm whole.  See further details here.

Barbie Club embezzlement trial begins soon

Cynthia Fern Izon, 43, former treasurer of the Barbie Doll Club of Eastern Oklahoma, will shortly go on trial for embezzlement. Izon, who was entrusted with taking care of funds netted from charity auctions held at the 2000 National Barbie Doll Convention, has been charged with allegedly embezzling more than $175,000 from her Club.  See the full story here.

Will Nelson's Attorneys in Patterson-UTI Embezzlement Case Have to Disgorge Fees?

We've been following the case of Jonathan Nelson who is accused of embezzling nearly $70 million from Patteron-UTI, a Texas-based oil drilling company. The question now before the judge is whether Jonathan Nelson's attorneys and estranged wife have to return money that they say was legitimately paid to them from salaries, shares and bonuses Nelson eared while at Patterson UTI. The SEC says Nelson and his attorneys knew he was being investigated when they were paid and the money was transferred fraudulently. See the story here.

Embezzlement "Soap Opera" Goes to Jury

A case involving two defendants accused of embezzling $1.2 million from a car dealership was sent to a jury. The dramatic courtroom testimony in the case told of an inter-office romance, a rich business owner involved in a divorce, and weekend shopping trips for co-workers of the accused.  The defendants were the comptroller and general manager of the dealership, which did between $50-80 million a year in sales. The two were charged with abusing the accounts receivable system at the company, which allegedly allowed them to take paycheck draws and then cover up evidence of the draws. See the full story here.

Former Bank Vice President Sentenced To Federal Prison for Embezzling $1.2 Million

The U.S Attorney's Office for the Western District of Texas issued a press release on February 3, 2006 announcing that Rosa Sullivan, 49, of San Antonio, Texas, will spend 46 months in federal prison for stealing $1.2 million from the Bank of Sierra Blanca. Sullivan was also ordered to pay $884,473 restitution to the Federal Deposit Insurance Corporation and be placed under supervised release for a period of five years after completing her prison term. See the release here.

The release was brought to our attention by a post on the White Collar Crime Prof Blog.

Texas couple accused of embezzling millions of dollars Arrested

A couple accused of embezzling two million dollars from a South Texas hospital using fictitious media companies have been arrested. See the news report here.

Woman gets 6 months for embezzlement instead of 1,300 years

Shirley Ann Coker stood to be sentenced to more than 1,300 years in prison - five years in jail for each of the 262 counts of fraud and forgery against her, and 30 years for scheming to defraud, in connection with her embezzling $582,000 from a local contractor, Brent Garrod. Instead, she will serve 10 years of probation, pay $50,000 in restitution, and hand over to Garrod the rights to a 10-acre ranch she and her husband own in Hardee County.

Coker's plea deal was worked out after the prosecutor decided to let her attorney negotiate with Garrod's attorney in connection with the civil lawsuit filed against her by Garrod.

See full story here.

Jail time for lawyer who embezzled from elderly

Another sad story of embezzlement by an attorney - Elizabeth "Betsy" Zembko -- who pleaded guilty to stealing funds from five of her elderly clients, was sentenced to 15 years incarceration, and ordered to pay restitution of $116,000. The sentence was handed down notwithstanding pleas from Zembko's lawyer that Zembko receive a significant period of house arrest rather than incarceration given that Zembko had already been punished through the destruction of her career. See the full story here.

Missing checks led to embezzlement case

A recent story of employee theft in the Ann Arbor News again highlights the importance of strong internal accounting controls to detect embezzlement. In this case, Robert Frushour, the principal of Phoenix Crystal Corp., a small diamond drill bit company, couldn't figure out why his business was losing money, even though sales were good and cost-cutting measures had been implemented. The mystery was solved when Frushour asked his office manager to explain why suppliers were complaining that they hadn't been paid when the general ledger showed they had been. When Frushour asked to see the actual checks, the office manager replied that she automatically destroyed all checks she wrote for the company.  The office manager then excused herself from the meeting with Frushour and left the office. She never returned.

It was ultimately discovered that the office manager had written about 150 checks totaling $720,000 to herself and a co-conspirator. Unfortunately, the revelation came too late as Frushour had already contracted to sell the business and lay off its dozen or so workers due to the company's "poor performance."

See the full story here.

California Attorney Charged With Embezzling More Than $300K from Elderly Clients

A California civil attorney will be arraigned this week on five counts of embezzlement and elder abuse for allegedly stealing more than $300,000 from clients that he represented in a home sale and a civil lawsuit. The prosecutor indicated that, in general, embezzlement from elderly individuals is underreported because the victims often don't know they've been victimized. "To have an attorney as a defendant in a case like this is even more rare," he added.

See the full story here.

North Carolina Woman Charged With Embezzling $1.2 Million

A North Carolina woman is in jail, accused of embezzling more than $1.5 million from her former employer.  See the news report here.

Tennessee Woman Pleads Guilty In Krystal Embezzlement

Chattanoogan.com recently reported that a Tennessee woman pleaded guilty in Federal Court to embezzling $91,928.94. The theft consisted of endorsing company checks over to her personal name. The accused was not caught; instead, she reported the embezzlement to the FBI and then confessed. See the story here.

Fort Smith Woman Arrested On Suspicion Of Embezzlement

An Arkansas woman was arrested on charges of embezzling over $400,000 from her employer through use of business checks to pay personal expenses. See link.

Former bank teller sentenced for embezzlement

A former bank teller accused of stealing $347,000 from her employer has been sentenced to one year and nine months in prison after pleading guilty to embezzlement. See story here.

Bank Exec Admits $2.4M Embezzlement

A former vice president at Fifth Third Bank has pled guilty to embezzling more than $2.4 million in a scheme involving fictitious loans. The plea also included a charge of filing false tax returns. The executive could be sentenced to up to 33 years in prison. See the full story here, including the Department of Justice release.

Former 3M Co. executive sentenced to prison for embezzlement

A former 3M executive was recently sentenced to 3 years in prison for embezzlement. The scheme involved submitting fraudulent invoices to 3M from purported vendors. The checks on the false invoices were directed to post office boxes controlled by the executive. See the full story here.

Michigan Woman Charged With Embezzling Nearly $1 Million From Life Insurance Policyholders

A Michigan woman, Bobbie Jo Fritz, was arraigned on Monday on charges she embezzled nearly a million dollars through a life insurance scheme she devised while working as a secretary/bookkeeper at a local insurance agency. The charges allege that Fritz “borrowed money” from five different victim’s whole life insurance polices during a time period spanning from October of 1996 until August 2005, and diverted the funds to personal use. An invesetigation was launched when a family member of one of the victims noticed certain improprieties in their life insurance policy account. See the full story here in the online Huron Daily Tribune.

Senior Wal-Mart Exec Enters Guily Plea

We last reported on January 9th that former Wal-Mart vice chairman Thomas M. Coughlin had agreed to plead guilty to five counts of wire fraud and one count of tax evasion; see post here. On Tuesday, Coughlin entered his pleas before U.S. District Judge Robert T. Dawson in Fort Smith, Arkansas.

In a statement distributed by his lawyer, Blair G. Brown of Zuckerman Spaeder in Washington, Couglin said: "Today I accepted responsibility for serious personal mistakes in judgment.  I regret the embarrassment this matter has caused my family and friends, and I thank them for their support, love and friendship."

See the full story here on Bloomberg News.

New Hampshire Woman Pleads Guilty to Embezzlement

A New Hampshire woman recently pleaded guilty to embezzling over $350,000 from an insurance claims management company where she worked. The woman arranged for claims checks to be sent to her home using fictitious names. The scheme was uncovered through an internal audit - highlighting the importance of such preventative measures. See the full story here.

Slew Of Cases Allege Financial Aid Abuse at Florida College

A slew of cases alleging financial aid abuses by coaches and athletic directors at the Barton County Community College are upcoming on the federal court calendar.  The defendants are alleged to have embezzled federal funds by falsifying timecards so players could receive money from federal work-study programs without doing any work. See the details of the charges against each defendant here.

North Carolina Man Charged in $650,000 Embezzlement Case

Authorities arrested a Rocky Mount, North Carolina resident last Thursday in connection with an embezzlement scheme that topped $500,000. The individual, Tocoby McCoy, was an agent for Hege Meyer, which handled purchasing for engine manufacturer, Consolidated Diesel. McCoy's is charged with having perpetrated a scheme that involved purchasing tens of thousands of dollars of electronic items such as iPods, laptops and cameras for Consolidated Diesel, diverting the items to a network of Internet resellers, and then deleting the paperwork from Hege Meyer's accounting system. See the full story here.

White Collar Crime Prof Blog: 'Tis the Season for Embezzlement'

The White Collar Crime Prof Blog continues to report on breaking embezzlement cases. The latest involves a woman, Anna Anderson, who entered a guilty plea to wire fraud charges related to embezzling almost $900,000 from a lobbying firm.  Anderson wired funds from the firm's bank account into an account she opened at a Virginia bank, and then transferred some of the money into her fiance's account. The couple used the funds for a variety of luxury purchases, including cars, jewelry, clothing and parties.

As Professor Henning notes, what makes this case interesting is that Anderson was convicted of embezzlement in Virginia just one year before she started working for the lobbying firm in 2004.  She was placed on six years probation for that offense, and of course was still on probation when the lobbying firm hired her as its bookkeeper.  Anyone believe in background checks?

See the full post here.

Michigan Man Pleads Guilty to Embezzlement Charges of $900K

A man accused of stealing more than $900,000 from his employer pleaded guilty today to embezzlement charges in a Michigan court. The man had used company funds to pay personal expenses through improper bank transfers. See full story here.

Ex-McDonald's Official Guilty of Embezzlement

George Gudgeon, 56, of Aurora, Illinois was a regional financial director working out of McDonald's Warrenville, Illinois office when a 2004 internal audit discovered that he had been issuing and cashing bogus invoice. See the news report here.

Patterson-UTI Energy to Revise Additional Financial Statements

In the continuing saga of Patterson-UTI Energy, the company has announced that it will revise financial statements for the years a former chief financial officer worked for the company. The former CFO, Jonathan Nelson, faces charges for allegedly embezzling $70 million from the company. See latest news update here.

Former Office Assistant Pleads Guilty to Stealing $1.35 Million From Real Estate Company

The U.S. Attorney for the District of Columbia has issued a press release announcing that Janette Faber, a former office assistant for Snyder Properties, a local real estate management company, has pled guilty to stealing $1,354,376 from her employer. The scheme involved issuing $1,354,376 in checks from Snyder's bank accounts made payable to Faber or her creditors. To conceal her activities, Faber omitted material information from Snyder Properties' accounting records and removed cancelled checks from Snyder Properties' monthly bank statements. See the full release here. Thank you to the White Collar Crime Prof blog for bringing this release to our attention here. Professor Podgor of that blog rightly expresses surprise that an employee of Faber's ranking was able to steal so much money over a 5 year period without anyone noticing.

Baltimore Resident Indicted for Obtaining More than $850,000 in Wire Transfer Scheme

The White Collar Crime Prof Blog recently referenced a post on the press blog of the U.S. Attorney for the District of Maryland reporting the indictment of a Baltimore resident, Bryn Phillips, for allegedly engaging in bank, mail, and wire fraud schemes that allowed her to illegally obtain more than $850,000 in money, products, and services by defrauding her employer, Old Mutual Financial Network ("OMFN") and federally insured banks.

The indictment alleges that Phillips falsely represented to Wachovia Bank that OMFN gave her authority to cause the issuance of wires transferring monies from OMFN accounts at Wachovia Bank to Wachovia Bank and MECU accounts controlled by Phillips. She allegedly caused checks to be drawn against OMFN’s account at Wachovia Bank that were payable to entities controlled by Phillips, and/or her relatives and associates, and allegedly withdrew and wired monies from OMFN accounts which OMFN had intended to be used as payment for OMFN business expenses, to Wachovia accounts under Phillips’s control.

Phillips also allegedly used names and passwords of employees under her supervision to execute wire transfers from OMFN corporate accounts into accounts she controlled.

The indictment also alleges a second fraud scheme. OMFN issued Phillips a corporate credit card for business expenses of OMFN. Phillips allegedly initially submitted reimbursement requests to other OMFN employees and later reviewed and authorized payments for the corporate credit card herself.

The indictment further alleges that from September 2003 to January 20, 2005, Phillips made a number of unauthorized purchases and obtained a variety of products, services and trips through the unauthorized use of OMFN corporate credit cards including services and lodging at the Venetian Hotel in Las Vegas, Nevada; personal property including two Louis Vuitton handbags, a $4,095 pink mink jacket with fox trim, and jewelry; home improvements; and professional basketball tickets. She allegedly submitted fake credit card statements to OMFN causing her to obtain more than $150,000 from OMFN in improper reimbursements. The indictment seeks a forfeiture of $862,747.48.

The White Collar Crime Prof Blog rightly questions here how Phillips - clearly not a senior executive of the bank - could have gotten away with her alleged scheme for so long without detection by internal auditors at OMFN - a $22 billion (assets) insurance holding company.

See the U.S. Attorney, District of Maryland, press blog here.

Traverse City Business Owners Plead Guilty to $1.1 Million Embezzlement Scheme Targeted at Northern Michigan Seniors

Michigan Attorney General Mike Cox recently announced that financial services company Estate Growth Management and its principals, Gary Singer and Margaret Zimmerman, each pled guilty to two felony charges after reaching a plea agreement with the Attorney General's Office. The defendants had persuaded their mostly elderly clients to invest money in various speculative investments that never yielded the promised returns even as the principals were withdrawing large sums as commissions. See the full story here.

Former Wal-Mart Executive to Admit Fraud

A new senior corporate executive is making headlines for financial improprieties. Former Wal-Mart Stores Inc. vice chairman Thomas M. Coughlin, formerly #2 at Wal-Mart, has agreed to plead guilty to five counts of wire fraud and one count of tax evasion. According to an internal company report released in July, Coughlin, whose compensation topped $4 million in 2004, used company money to pay for CDs; beer; an all-terrain vehicle; a customized dog kennel; and a computer (a graduation gift for his son), explaining that they were routine business expenses.

See further details of the plea here.

The Coughlin case has also been covered on White Collar Crime Prof Blog, see here.

Virginia Man Gets 33 Months for Embezzlement

A Virginia man, Dennis Maki, was recently sentenced to 33 months in prison for embezzling over $400,000 from a mental health center, a lodge and a youth hockey association. Maki admitted to a gambling addiction, and having spent the embezzled funds at casinos. See the full story here.

Former Patterson-UTI Energy CFO Pleads Not Guilty to Embezzlement Charges

We've been keeping close tabs on the evolving saga of John Nelson, the former CFO of Patterson-UTI Energy, who stands accused of embezzling millions of dollars from the oil and gas drilling company.

Last Wednesday, Nelson pleaded not guilty to the charges against him of using a "bogus invoice scheme" to bilk millions from company coffers. Nelson was scheduled to go on trial in February. See further updates here.

Lawyer's Boyfriend Charged With Insider Trading

As noted, embezzlement is predicated on an abuse of trust.  While off-topic, a story recently reported in the White Collar Crime Prof Blog talks of a different kind of abuse of trust: a boyfriend who allegedly secretly engaged in insider trading based on knowledge of a transaction being worked on by his girlfriend - an associate at a prominent law firm who brought her work home with her.  See the full story here.