Barney’s On the Beat

Embezzler Sentenced: An embezzler does far more
damage than just sneak-stealing money. She can wreck businesses and
turn victims’ lives into a nightmare.

So what goes on in the heart and soul of an embezzler? How can
he or she work face-to-face every day with the people she’s
stealthily, arrogantly ripping off? Sometimes it’s to feed a drug
habit or pay medical bills but often it’s just pure greed, as
authorities say in the case of a 42-year-old Santa Barbara mother
of two sentenced to prison last week.

Since courts usually treat such thefts as white-collar crime
deserving of probation or a short jail term, I wondered what was
unusual here. And what motivates embezzlers in the first place?
Experts say fraud at every level is thriving in post-Enron America,
whether stealing big or stealing small. A New Mexico woman is
accused of taking money earmarked for a high school choir trip. The
CEO of a Southwest oil and gas drilling company is stunned at
hearing of the possible embezzlement of $70 million. In his classic
book, Other People’s Money, Donald Cressey, the late UCSB professor
of sociology, said embezzlers normally have some type of perceived
financial problem they feel has to be dealt with secretly and they
have the means, motive, and rationale to steal.

Less than a year after partners in a small family-owned Santa
Barbara insurance brokerage hired the woman, they were shocked to
learn that she’d embezzled more than $20,000, cleaned out their
bank account, maxed out their credit cards, caused severe financial
hardship in other ways, and nearly destroyed their business,
according to court records. They were still climbing out of debt
when Superior Court Judge George Eskin sentenced the Santa Barbara
High graduate to three years and eight months in prison. (I am not
using her name in consideration of her children and family.)

Embezzlement may be the least reported felony next to rape. “We
have run across many people that have had some sort of employee
theft and found that many times the victims did not pursue
prosecution because of the shame they felt,” one of the brokerage
owners wrote Judge Eskin before sentencing. Other victims don’t
want the publicity or don’t want to put in the time and effort to
bring charges. “I think that the victims need to know that they can
prosecute and the thieves need to know that they can’t get away
with it,” one of the partners told me.

The woman’s stealing binge ended after a bank warned the
partners of suspicious money transfers. “If the theft had been
found much later, the company would have had to close its doors,”
the partner wrote Judge Eskin.

The employee “took every last dime in the business accounts and
ran the credit cards up beyond their maximums.” The owners had to
use $40,000 in retirement money to make up for the lost
income — costing them $5,000 in penalties — and even had to borrow
money from relatives to keep the business afloat.

Was a prison sentence too extreme for a $24,662 white-collar
theft case? I talked to Assistant District Attorney Darryl Perlin,
who handled the case and cited three reasons why the judge sent her
away: The probation report recommended prison, the devastation
suffered by the victims and the fact that it was not a case of
feeding a drug habit but of greed, broken trust, and stealing
everything possible while carefully covering it up.

In recommending prison, the probation report said, “It is
recognized that the defendant is a long-term drug addict and has
made steps to achieve her sobriety. However, this is not a case
about the defendant’s substance abuse, but about her deliberate
actions to embezzle money for her personal use.” Her attorney urged
probation and jail, pointing out that she’s been living in a sober
living house, attended AA, worked part-time, and received treatment
for her bipolar disorder. “The fact that the bipolar disorder was
never addressed and properly treated has no doubt had an impact on
her criminal behavior.”

There’s also the victims’ pain of blatant betrayal after being
trustful. “It is very unnerving that (she) would come to work every
day, sit face-to-face with me, and complain about her life and not
having any money or whatever it was at the time, all the while
stealing and cleaning out my accounts,” one owner wrote Judge
Eskin.

According to the owners, she stole $21,730, cost them $2,932 in
professional fees for a total of $24,662, plus finance charges,
bounced check fees, and other charges. During the audit, it was
discovered that she had arranged for the business to pay for her
two cell phones, her home cable TV and Internet service, and even
gave herself two unauthorized raises. “We even received a call from
her attorney asking for her final paycheck. This request was absurd
because (she) had written herself a full paycheck four days early,
forged it, and cashed it.” The partners eventually received $21,730
from insurance and $7,500 in restitution, refunding the balance to
the insurance company.