New York Man Arraigned for Allegedly Embezzling Union Funds

The United States Attorney for the Northern District of New York recently announced that James G. Russell was arraigned in federal court on charges of allegedly embezzling $54,000 in union funds while acting as secretary- treasurer of Stage and Picture Operators Local Union 9 in Syracuse, New York. During his court appearance, the defendant pled not guilty.

See the full release here.

Silicon Valley Bank Manager Pleads Guilty to Embezzlement

The United States Attorney for the Eastern District of California announced last week that Rose Magpantay Valdez pleaded guilty on July 12, 2006, to bank embezzlement in connection with a scheme to steal bank funds for her own personal use by exploiting a weakness in the bank's security systems.

Briefly, because Ms. Valdez served as a bank manager, she had access to the bank’s general ledger accounts and the authority to move monies from one general ledger account to another, with the approval and initials of one of several other authorized bank employees. Ms. Valdez stole funds by filling out debit and credit slips that reflected that monies were being transferred from one general ledger account to another pursuant to bank business. Ms. Valdez would then illegibly scribble fictitious names on the slips, initial the slips, and submit them to another authorized bank employee to approve and initial. The employee would return the slips to Ms. Valdez, who would replace the deposit slips with her own slips in the same dollar amount. Ms. Valdez admitted to using odd dollar amounts so as not to arouse suspicion.

See the District Attorney's release here.

Former Spa Bookkeeper Arrested for Embezzlement

Ruth C. Fallis, the former bookkeeper for the Perry Anthony Design Group, a salon/day spa in Pike Creek, Delaware, was arrested Friday morning for her alleged role in embezzling in excess of $1,000,000 from the company, announced the United States Attorney for the District of Delaware.

As the affidavit attached to the criminal complaint describes, between December 2001 and October 2005, Fallis, who had been the bookkeeper for the Perry Anthony Design Group since 1991, embezzled money from the salon/day spa in at least two ways: by forging checks totaling over $500,000 from the company’s account to herself and to companies/vendors to whom she owed money for personal expenses such as credit card purchases and home improvements; and by stealing more than $500,000 of cash receipts that she was responsible for depositing into the company account. In order to hide the theft, in 2002, Fallis stopped making the quarterly federal tax deposits on behalf of the Perry Anthony Design Group and diverted calls and notices from the IRS to herself, so that the owner would remain unaware of the scheme.

A lesson in this sad tale for small businesses - do not repose exclusive responsibility for important financial matters in one person without checks and balances to detect wrongdoing.

See the full release here. (PDF)

South Dakota Man Pleads Guilty to Embezzlement

United States Attorney for the District of South Dakota announced that Larry Schoenbeck pled guilty to an indictment which charged him with embezzling approximately $14,250 from a credit union. The maximum penalty upon conviction is 30 years imprisonment and a $1,000,000 fine.  Sentencing is set for October.

See the full release here.

Broker Embezzles from Father-in-Law

The White Collar Crime Prof Blog posted yesterday on the guilty plea of a Merrill Lynch broker who stole $420,000 from his father-in-law's account. The guilty plea was reported in a press release issued by the U.S. Attorney for the District of Connecticut. As Professor Henning notes, the next family gathering is certainly going to be interesting.

See the post here.

Former Newark Bank Loan Officer Admits Embezzling $1.1 Million

The U.S. Attorney for the District of New Jersey recently announced that a former loan officer at Independence Community Bank ("ICB"), Pamela Cruz, pleaded guilty to a one-count Information charging her with embezzling approximately $1.1 million from her former employer. Cruz's scheme involved the transfer of funds into two dormant customer accounts that ICB has acquired in a merger, and subsequently transfer of the embezzled funds from those accounts into other ICB accounts that she controlled. Since Cruz was responsible for the reconciliation of internal ICB general ledger accounts at the end of each month, Cruz was able to adjust month-end reconciliations of such accounts to conceal her unauthorized transfers.

See the full release here.

Past Company President and CFO Indicted on Charges Arising Out of $850K Embezzlement

The U.S. Attorney for the Eastern District of California recently announced that Peggy Kaye Witts, 59, of Redding, California, has been charged in an indictment with mail fraud, wire fraud, false filing of a pension plan document, money laundering, tax evasion and forfeiture of her house in Redding arising out of her alleged embezzlement of over $850,000 from the Voorwood Company, Inc., of which she was President and Chief Financial Officer. The indictment charges that Witts allegedly issued duplicate paychecks to herself for over four years and other checks to family members.

See the full release here.

Ohio Man Sentenced Based on Embezzlement Plea

Gregory A. White, United States Attorney for the Northern District of Ohio, announced yesterday that John D. Chiappetta, of Richmond Heights, Ohio, was sentenced to 38 months imprisonment, followed by 3 years of supervised release, based on his previous guilty pleas to, among other things, two counts of embezzlement from a health care benefit plan sponsored by his now-defunct company, Euclid & Wickliffe Services, Inc (“E&W”).  E&W was a custom sheet metal fabricating company based in Eastlake, Ohio. Chiappetta admitted that from approximately January 1 through June 4, 2001, he embezzled $29,137.50 of health care premiums withheld from the payroll of 90 employees and $2,199.33 of COBRA premiums paid by two former employees health care premiums by causing E&W to make substantial expenditures for his personal benefit and for other E&W business purposes, while at the same time failing to make timely payments of those withheld and COBRA premiums.

See the full release here.

Former Boeing Director Sentenced for Improper Expense Card Charges

The U.S. Attorney for the Eastern District of Missouri announced last week that Robert D. Rice, former Boeing Director of Supply Chain Management, was sentenced to one year and one day in prison this morning for using Boeing expense cards to make personal purchases that included a $52,000 BMW automobile. He was also ordered to pay restitution of $299,382.69, which he paid this morning at sentencing.

The embezzlement scheme involved a second employee, Lisa J. Hernandez. Hernandez would use the expense cards to make the purchases (which included an automobile, artwork, jewelry, home improvement items and vacations totaling more than $299,382), and then submit the expenses to Rice for his approval and submission for payment to Boeing. In order to further facilitate this scheme, Rice created a shell company in Nevada called Leantraining. Rice would approve purchases by Boeing to Leantraining for “training materials.”

See the full release here.

Bank Employee Arrested for Embezzling Checks

Ursula Nicole Moore, an employee of Bank of America, pled not guilty earlier this week at an arraignment to charges that she stole approximately $30,000 in money orders and checks from the Internal Revenue Service (IRS) Lockbox operation at Bank of America, in Richardson, Texas.

According to the affidavit filed with the criminal complaint in this case, from February 22, 2006 to April 17, 2006, Moore embezzled nearly $30,000 in money orders and checks made payable to the IRS from the IRS lockbox. On May 24, 2006, she opened an account at the Wells Fargo Bank at Abrams Road and Skillman Street in Dallas. Moore altered the checks she had stolen from the IRS Lockbox and deposited those checks into this Wells Fargo bank account, and then used the funds for her personal benefit.

See the full release here.

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