An oldie but a goodie — British Columbia’s ELIA KRATKY embezzles $436k from three dental offices; receives conditional sentence

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                     Reasons for Sentence

                     Mr. Justice Curtis

                       October 8, 1997

                    HER MAJESTY THE QUEEN


                        ELIA KRATKY

Counsel for the Crown:                          Mr. Carstairs

Counsel for the Defendant:                        Mr. Gibbons

                                                   Mr. Fowler

[1]  THE COURT:  Elia Kratky has pleaded guilty to three counts of fraud.  She admits that using her position as a part-time manager and bookkeeper for three local dental clinics, she defrauded the clinics and the nine dentists involved of a combined total of $436,535 between January 1, 1991 and March 31, 1995.

[2]  Ms. Kratky’s fraud was discovered in March 1995 when a departing employee informed the dentists at the Capilano Centre that Kratky was not accurately preparing daily bank deposits and other bookkeeping entries, and an investigation was started.  Kratky’s employment was terminated and it was discovered that Kratky had, by various means, taken substantial amounts of money.  She took cash which she was supposed to have deposited for the clinics.  In the guise of paying legitimate clinic accounts, she used cheques to transfer money to herself.  She also altered the payees on some cheques to deposit money to her own credit.  She manipulated financial books and records in her control to hide her misappropriations.

[3]  Ms. Kratky is 52 years of age and married with an adult daughter.  She has a grade 10 education.  Her previous criminal record is a conviction in 1979, when she was 34, for three counts of theft over $200, for which she received a suspended sentence and 12 months probation.

[4]  The dentists who were defrauded commenced two civil actions against Elia Kratky and others, including her husband.  These actions have resulted in a settlement in which a consent order has been entered requiring Ms. Kratky to pay the principal sum of $828,000, prejudgment interest of $145,065.90, and punitive damages of $60,000, plus special costs and disbursements.  Of this amount, $608,662.41 has been paid by the disposal of assets of Ms. Kratky and her husband, as documented in the defence exhibit.  Accordingly, Elia Kratky and her husband have repaid the amount of the fraud admitted in these proceedings, and more.

[5]  The nine dentists defrauded have suffered financial loss, and as documented in their victim impact statements, personal turmoil and a profound feeling of betrayal.

[6]  Subsequent to the discovery of her fraud, Elia Kratky has been hospitalized for depression.  She is currently under the treatment of Dr. Eaves, a psychiatrist whom she sees once a week.  It is Dr. Eaves’ opinion that she remains deeply depressed and has recurrent suicidal ideation.  Dr. Eaves states that she acknowledges what she has done was wrong and is extremely remorseful, although I note one of the dentists, in his victim impact statement, states that Ms. Kratky gave no apology and no explanation for her actions throughout the civil suit taken against her.

[7]  In these proceedings, in addition to pleading guilty, she waived the preliminary hearing.  Mr. Carstairs, on behalf of the Crown, submits that 18 months to two years less a day is the appropriate range of sentence.  He specifically advised me that I must consider the provisions of the Code relating to a conditional sentence in this case, but stated the Crown takes no position on whether a conditional sentence should or should not be imposed.

[8]  Mr. Gibbons, for Ms. Kratky, does not take issue with the range of sentence suggested by the Crown, except to the extent that he suggests 12 months may be appropriate, but urges me to make any sentence a conditional one.

[9]  The purposes and principles of sentencing are set out in the Criminal Code.  S. 718 of the Criminal Code states:

The fundamental purpose of sentencing is to contribute, along with crime prevention initiatives, to respect for the law and the maintenance of a just, peaceful and safe society by imposing just sanctions that have one or more of the following objectives:

a)to denounce unlawful conduct

b)to deter the offender and other persons from committing offences

c)to separate offenders from society where necessary

d)to assist in rehabilitating offenders

e)to provide reparations for harm done to victims or to the community, and

f)to promote a sense of responsibility in offenders and acknowledgement of the harm done to victims and to the community.

[10] S. 718.1 states:

A sentence must be proportionate to the gravity of the offence and the degree of responsibility of the offender.

[11] S. 718.2, insofar as it applies to the circumstances of this case, states:

A court that imposes a sentence shall also take into consideration the following principles:

a)a sentence should be increased or reduced to account for any relevant, aggravating or mitigating circumstances relating to the offence or the offender, and without limiting the generality of the foregoing evidence that the offender, in committing the offence, abused a position of trust or authority in relation to the victim shall be deemed to be aggravating circumstances.

b)a sentence should be similar to sentences imposed on similar offenders for similar offences committed in similar circumstances.

c)where consecutive sentences are imposed, the combined sentence should not be unduly long or harsh.

d)an offender should not be deprived of liberty if less restrictive sanctions may be appropriate in the circumstances, and

e)all available sanctions other than imprisonment that are reasonable in the circumstances should be considered for all offenders, with particular attention to the circumstances of aboriginal offenders.

[12] S. 742.1 of the Criminal Code of Canada states:

Where a person is convicted of an offence, except an offence that is punishable by a minimum term of imprisonment and the court:

a)imposes a sentence of imprisonment of less than two years, and

b)is satisfied that serving the sentence in the community would not endanger the safety of the community and would be consistent with the fundamental purpose and principles of sentencing set out in s. 718 to 718.2

the court may, for the purposes of supervising the offender’s behaviour in the community, order that the offender serve the sentence in the community subject to the offender’s complying with the conditions of a conditional sentence order made under s. 742.3.

[13] The imposition of conditional sentences has recently been given extensive consideration by the Court of Appeal in this province in the case of Regina v. Ursal et al.  At page 49 of the Ursal decision, Justice Ryan states:

Accordingly, when asked to consider imposing a conditional sentence where the Code does not mandate a minimum sentence, the judge must first consider whether a sentence of less than two years is appropriate in the circumstances.  If the trial judge determines that a sentence of imprisonment of less than two years is fitting, he or she will then go on to consider the type and length of sentence, taking into account the requirements of s. 742.1(b) and the principles and objectives of sentencing.  If the trial judge decides to impose a conditional sentence, the trial judge will bear in mind, in determining the length of the sentence, that while a community sentence may not be as severe as a jail sentence, a community sentence will be unaffected by parole as long as the offender remains in the community, and that if revocation should occur, the offender will serve some or all of the sentence in jail.

[14] I accept the submission of Crown counsel that the appropriate range of sentence for this case is 18 months to two years less a day.  I am satisfied that Ms. Kratky would not endanger the safety of the community if she were to serve her sentence in it.

[15] The remaining question therefore is whether a conditional sentence would be consistent with the fundamental purpose and principles of sentencing as set out in the sections to which I have just referred.  Although it is not possible to be certain a person will not repeat their offence, I think it unlikely that Elia Kratky will do so.  Accordingly, the only two purposes of sentencing that might not be met by a conditional sentence are those of denouncing unlawful conduct and deterring others.

[16] A conditional sentence imposes substantial restraint upon the liberty of the offender.  It is not subject to parole and therefore must be served in full.  Jail sentences for offenders like Ms. Kratky are frequently served on electronic monitoring and often reduced to one-third of the sentence through mandatory supervision and parole.  The practical reality is that while a jail sentence may sound more severe, a conditional sentence in totality may be equally or significantly as severe as the jail sentence.

[17] I am satisfied that in this case the principles of denunciation and general deterrence, along with the other principles of sentencing, can reasonably be served by a conditional sentence of 18 months.

[18] Elia Kratky, would you stand, please.  On each of counts 2, 4 and 6 to which you have pleaded guilty, I sentence you to serve a conditional sentence in the community, the conditions of which sentence are as follows.  You shall keep the peace and be of good behaviour; appear before the court when required to do so by the court; report to a supervisor within two working days and thereafter when required by the supervisor and in the manner required by the supervisor; remain within the jurisdiction of the court unless written permission to go outside that jurisdiction is obtained from the court or the supervisor; notify the court or supervisor in advance of any change of name or address; and promptly notify the court or the supervisor of a change of employment or occupation.

[19] In addition, you shall abstain from the consumption of alcohol or other intoxicating substances; attend a psychiatric treatment program as directed by Dr. Eaves or your supervisor; and comply with the following terms which I consider desirable to secure your good conduct and prevent the commission of other offences.  Seek and maintain gainful employment; advise your employer of your conviction for these offences; be in your residence at 6635 Wade Road, Delta, between the hours of 7:00 p.m. and 7:00 a.m., except for the purposes of employment or medical treatment; and for the purpose of ensuring your compliance with these conditions, authorize your supervisor to attend and enter your residence at any time.

[20] You shall receive a copy of this order. Under s. 742.4 of the Code, your supervisor may propose changes to the conditions I have ordered. Under s. 742.6, should you breach any of these conditions, you may be charged with doing so, which could result in the conditions being changed or your serving the rest of the sentence in jail.

[21] The sentences imposed on all three counts are to be served concurrently, that is, at the same time.  You may sit down, ma’am.

                             “V.R. Curtis, J.”                

                             The Honourable Mr. Justice V.R. Curtis


New Jersey Medical Office Receptionist Pleads Guilty to $446k Embezzlement, Credit Card Fraud, and Tax Evasion

Editor’s note — as you may know, we normally confine ourselves to investigating dental office embezzlement.  However, we do provide reporting on significant embezzlements in medical offices because the methodologies employed have considerable commonality.

NEWARK, NJ-A receptionist previously employed by a medical office in Kearny, New Jersey, today admitted embezzling more than $446,000 from her former employer, using fraudulent credit cards to obtain more than $200,000 in goods and services and evading taxes on that illegal income, U.S. Attorney Paul J. Fishman announced.

Gwendolyn Muller, 53, formerly of Kearny, pleaded guilty before U.S. District Judge William J. Martini in Newark federal court to an information charging one count each of embezzlement, credit card fraud and tax evasion.

According to documents filed in this case and statements made in court:

From 2007 through 2011, Muller used her position at the medical practice to take, cash, and conceal more than $446,000 in checks paid by insurance companies to the medical practice for services to patients. At various times during this same period, Muller also fraudulently obtained 10 credit cards in the name of a principal of the medical practice and used those cards to charge more than $218,000 in goods and services-a portion of which Muller paid for with embezzled funds. Muller also admitted to filing a false tax return to evade the payment of taxes on this illegally obtained income.

The embezzlement and credit card counts to which Muller pleaded guilty each carry a maximum potential penalty of 10 years in prison, and the tax count carries a maximum potential penalty of five years in prison. All three counts are also punishable by a fine of $250,000, or twice the gross loss or gain caused by the offense. Sentencing is scheduled for Feb. 19, 2015. Under terms of the plea agreement, Muller is required to forfeit $556,000 to the United States.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford, and IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Jonathan D. Larsen, with the investigation leading to today’s guilty plea.

The government is represented by Senior Litigation Counsel Andrew Leven of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Newark.

U.S. Attorney Fishman reorganized the health care fraud practice at the New Jersey U.S. Attorney’s Office shortly after taking office, including creating a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since 2010, the office has recovered more than $540 million in health care fraud and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act and other statutes.

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Content retrieved from: Federal Bureau of Investigation – Newark Field […] (via noodls) / Medical Office Receptionist Pleads Guilty to Embezzlement, Credit Card Fraud, and Tax Evasion

3 Charged in Plot to Embezzle Money from California Dentist and launder at Bingo Hall

Two men and a woman embezzled $309,000 over three years in a scheme involving a church bingo hall, according to charges filed by the Santa Clara County District Attorney’s Office.

Deputy District Attorney Julie Sousa said 56-year-old Nadine Marcias illegally signed checks sent to her employer, a dentist, and cashed those checks at the church bingo hall where she played Flash, an electronic bingo game. Two people at the bingo hall took perhaps 10 percent of the check and gave the balance to Marcias, Sousa said.

The hall required Marcias to spend half of the balance on bingo and she kept the rest for herself. The two suspects from the bingo hall allegedly involved in the scheme were 77-year-old Tusameme “Sal” Sinapati Salanoa and 63-year-old Atonio “Tony” Leulu. “It was their own side deal,” Sousa said. The dentist noticed a series of Denti-Cal checks missing, which led to the discovery of the scheme.

Prosecutors have charged Marcias with felony employee embezzlement and check forgery. She surrendered Thursday. Prosecutors have charged Salanoa and Leulu with forgery. Prosecutors said the three could spend as much as five years in prison.

The arraignment for Salanoa and Leulu is set for June 11 at the Hall of Justice and the arraignment for Marcias is set for July 6. Sousa said the dentist is entitled to restitution under the state’s bill of rights for victims, and the church might reimburse him. “We must order restitution,” Sousa said. “But the flip side of that is that you cannot get blood from a stone.”

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Content retrieved from: //

West Virginia dental receptionist accused of embezzling $250K

HAMLIN – Dental practices in Hamlin and Alum Creek claim embezzlement of at least $250,000 by a veteran employee, and allege that in three months prior to her Hawaiian vacation last year, there were no cash payments recorded.

Dentists William J. Artrip and Carol V. Buffington accuse former employee LaDonna Johnson, who worked as receptionist in the Hamlin office and received and attended to depositing receipts. She was terminated in June. Her responsibilities included scheduling appointments, receiving and crediting cash and other payments from patients, inputting payment information and credits into management software, making bank deposits and billing paperwork.

The complaint tells of Artrip performing a seven-tooth extraction on June 11, 2011, then witnessing the patient giving $700 cash to Defendant.

“Dr. Artrip took the cash and checks to be deposited home with him,” the complaint says.”Dr. Artrip reviewed the deposit slip (prepared by Johnson) and… to his surprise, the $700 in cash he saw Patient A deliver to the Defendant did not appear on the deposit ticket and there was no cash to be deposited.”

Johnson was not at work June 12, and Dr. Artrip was unable to account for the $700, the suit says. On June 14, Artrip met with Defendant, explained accounting discrepancies and terminated her.

Three weeks later, an envelope containing $700 was discovered in a cabinet beside Defendant’s computer, the suit says. When Johnson filed for unemployment compensation she was found to have committed misconduct during that process, according to the complaint.

Review of computer accounting records and patient charts, the complaint says, determined cash payments and other funds in large amounts were misappropriated. The plaintiff retained a forensic accountant to analyze computer accounting records and charts, with four specific schemes identified that converted and misappropriated more than $250,000, according to complaint.

“As a direct and proximate result of the Defendant’s embezzlement and conversion,” the complaint says, “the Plaintiff has suffered financial loss and harm in an amount not yet ascertained, but which upon information and belief is no less than $250,000.”

If embezzlement is found to have happened and an amount is fully determined, the plaintiffs want jury judgment for that amount against defendant, plus pre-and-post-judgment interest, punitive damages and litigation costs. Imposition of a constructive trust equitable lien is requested on any other items of value wrongly in Johnson’s possession, along with such other relief deemed just and proper.

Trial date to be determined for Lincoln Circuit Court, where Judge Jay M. Hoke presides. Attorney Thomas H. Ewing of Charleston is representing the plaintiffs.

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Content retrieved from: Dental receptionist accused of embezzling $250K | West Virginia Record

Wisconsin woman gets prison for embezzling $350,000: Dental clinic employee took trips, gambled

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Mary Ellen Wilson Embezzled $350000wilson

County Court Details

Records shown on this page may not refer to the same individual, and may or may not pertain to the same charge.
Full Name: Mary E Wilson
Record Date: 01 January 2003
Location: Waupun
Record Date
01 December 2005
Full Name
Mary E Wilson
October, 1949
County Name
Dodge County
719 W Lincoln St, Waupun, WI 53963
WI Admin Office of Courts(CF)
Offense Description
Offense Code
Offense Date
01 January 2003
Charges Filed Date
01 December 2005
Case Number
Case Type
Disposition Date
02 August 2006

Woman gets prison for embezzling $350,000: Dental clinic employee took trips, gambled.

The Milwaukee Journal Sentinel (Milwaukee, WI)
August 3, 2006

Byline: David Doege

Aug. 3–Waukesha — A woman who stole more than $350,000 from a New Berlin dental clinic where she formerly worked was sentenced Wednesday to three years in prison.

Mary Ellen Wilson, who used the stolen money at casinos, on trips and to buy clothes and furnishings, also was ordered to serve five years on extended supervision after prison, followed by 20 years of probation.

“This is a crime that occurred over five years,” Waukesha County Assistant District Attorney Lesli Schmit told Circuit Judge Paul Reilly. “This is a crime that occurred while she was a trusted employee.”

Reilly said the case was “about betrayal, about selfishness, about greed. …

Content retrieved from: Woman gets prison for embezzling $350,000: Dental clinic employee took trips, gambled. – The Milwaukee Journal Sentinel (Milwaukee, WI) | HighBeam Research

Julie Lake admits to embezzling $250,000 from Correll Dental in Spokane



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Julie Lake

Arrest record information
Arrest Date [1]: 03/25/2015
Agency: Spokane County Sheriff’s Office
State: Washington
County: Spokane County
Record Date [2]: July 27, 2015, 9:43 a.m. UTC
Tracking number: 724093



Person information
First Name JULIE
Last Name LAKE
Gender Female
Age at Arrest 45
Year of Birth 1970
Height 503
Weight 170
Eye Color BLU
Hair Color

North Carolina office manager sentenced to 3-4 years prison, pay restitution in embezzlement

guy williamsEx-office manager sentenced to prison, pay restitution in embezzlement case

Wednesday, December 16th 2015, 12:38 pm ADT Sunday, December 20th 2015, 12:37 pm ADT By: WECT StaffCONNECT Guy Williams (Content retrieved from: New Hanover Co. Jail)WILMINGTON, NC (WECT) –

Guy Williams, a former office administrator with Wilmington Plastic Surgery, was sentenced to prison Wednesday and ordered to pay restitution after pleading guilty to embezzling hundreds of thousands of dollars from the medical practice.

Former Wilmington Plastic Surgery administrator faces judge for embezzlement charges

Williams was sentenced to 3-4 years in prison, 60 months of probation, and ordered to pay $69,000 in restitution as well as $1,000 in court costs.

Three employees of Wilmington Plastic Surgery took the stand Wednesday to let the court and Williams know how much damage he caused. Dr. Jeff Church said Williams started stealing before he was even hired.

Williams got into a car accident shortly before he joined the practice, and once he was hired, charged his rental car to the company credit card, as well as a $4,000 down payment on his new car. Church said the spending sky-rocketed from there.

Williams spent more than half a million dollars on first class plane tickets to Paris for he and his wife, traffic tickets, delinquent taxes, his daughter’s sweet sixteen party, renovations to his home, and more.

Church said his firm has endured a lot of pain from William’s betrayal and his practice is ready for the closure.”We’re doctors, we want to take care of people, and the time and the effort we had to put into this really made double duty for us to do that, but we didn’t compromise our patient care and we took care of this,” Church said.

Williams started managing the plastic surgery office in 2007 before being fired in 2014, and later arrested.Warrants say Williams stole nearly $400,000 and forged a check for $200,000 with a doctor’s name.Williams faced a judge last year for two counts of embezzling more than or equal to $100,000, two counts of embezzlement, and one count of forgery of endorsement.

According to court officials, he pleaded guilty to 16 counts of embezzlement and one count of forgery of endorsement earlier this month as part of a negotiated plea.

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Content retrieved from: Ex-office manager sentenced to prison, pay restitution in embezz – WECT, weather & sports Wilmington, NC

NM woman pleads guilty to embezzlement of more than $300k; gets probation

A prominent Roswell community member has pleaded guilty to an embezzlement charge and been given a suspended sentence of nine years in a criminal case involving circumstances that destroyed longtime friendships and also gave rise to a related civil lawsuit in which her former employer said she stole more than $300,000 from him.

Sherry C. Eckel, 65, pleaded guilty Wednesday in a courtroom in Carlsbad to a second-degree felony, embezzlement over $20,000, in an agreement that involved the dismissal of another count, unlawful obtaining or attempt to obtain dangerous drugs, a fourth-degree felony.
The charge that was dropped involved the allegation that Eckel fraudulently obtained Botox, Juvaderm or similar drugs. The civil lawsuit filed by her former employer, oral surgeon Dr. Ben Smith, alleged Eckel had done so for the purpose of administering the drugs to others.
”What is totally lacking here is any explanation of why you have done this,” said Judge Lisa B. Riley with the Fifth Judicial District Court in Eddy County. “Usually what I see are people who have come from difficult circumstances, not someone who has everything going for her.”
All four Fifth Judicial District Court judges in Chaves County either removed themselves from considering the case or were asked to step aside, given their familiarity with Eckel and her husband. Jesse Eckel is a vice president at J.P. Stone Community Bank in Roswell and is a governor-appointed regent of the New Mexico Military Institute.
Riley made her statement after reading the defense team’s sentencing memorandum and accompanying letters of references, which the judge said reminded her of “an award [auth] nomination.”
She then rejected the suggestion of defense attorney B.J. Crow for a conditional discharge and instead ruled that the nine-year sentence would be suspended and that Eckel will serve three years on supervised probation followed by two years of parole. Eckel also was ordered to pay $180 in various fees.
Restitution was waived because Eckel and her husband previously had reached a settlement for an undisclosed amount to reimburse some of the money to Smith.
Assistant District Attorney Kristen Cartwright said that she could not comment on why the decision was made to drop the fourth-degree felony involving the obtaining of drugs, as that decision involved a prior District Attorney staff member. Cartwright also said she considers the case done.
”As far as I am concerned the case is over,” said Cartwright. The sentence “was exactly as we recommended …”
Eckel apologized for her actions in her statement to the court but did not give any reasons for behavior that Riley characterized as a pattern of conduct.
”This was not a mistake. This was not a one-time action,” Riley said. “It charges that this happened from March 1, 2013 to Feb. 28, 2015. That is a course of conduct over a period of time.”
Eckel had been an office manager for the local dental practice for Dr. Smith for more than 25 years, receiving what Smith has said was a six-figure annual income.
Smith, who referred several times to the betrayal of trust he, his staff and family experienced, said that he had discovered the embezzlement when he sold his local practice in 2013 and reviewed financial records as part of that process.
According to the civil lawsuit Smith filed against both Eckel and her husband, Smith said that she had taken at least $300,000 from his business by taking cash payments for herself rather than depositing them in the business account. He also claimed that Eckel wrote checks of about $83,000 to her two children using the dental practice business account. Smith alleged in that lawsuit that the husband would be aware of what was occurring because the Eckels held a joint bank account and his financial obligations to his children would have been decreasing.
Addressing the judge, Dr. Smith said, “In her capacity, she had my complete trust and that of my practice staff. She also was the trustee of my grandfather’s will. She had total access to all my accounts and she looted them of more than $1 million. The restitution that I have received is a fraction of that. She never said that she was sorry and she never showed remorse.”
Smith described himself as an empathetic and compassionate person.
”I am sorry that it has come to this point,” he said, “But I think anyone who violates our trust and does so against the statutes of this case deserves to be punished.”
Following the hearing, Smith said that he was satisfied with the outcome.
”She is a convicted felon and she will have to live with that for the rest of her life,” he said.
Eckel told the judge that Dr. Smith had told her stay away from him and his family, which is why she never apologized directly to him.
Crow, her lawyer, described his client as part of a loving family who had many supportive friends. He said that she has never before been in trouble with the law and that she was known in her community for her volunteer efforts with NMMI, the Rotary and other organizations.
The Eckels and their lawyer chose not to provide additional comments following the hearing.
”I have no doubt that you will be successful on probation,” said Riley after sentencing Eckel. “I do not expect to see you back here.”
Another civil lawsuit was recently filed against Eckel that questions her handling of financial matters.
Tara O’Connell of Tulsa, Oklahoma, filed suit in August alleging that Eckel has made questionable decisions regarding a trust that O’Connell’s grandmother, Eugenie M. Hanagan, established. Eckel was named primary trustee for the trust, which has since been dissolved. Included among the allegations in the pending suit are the statement that Eckel paid a credit card bill for her son with assets from the trust.
”That I do know,” said lawyer Angelo Artuso of Albuquerque, who represents O’Connell. “But I haven’t spoken to (Eckel) about it. There may be a reason why she would have been able to do that. We haven’t proven anything yet.”
He said that the lawsuit is in the discovery stage and that he and Eckel’s lawyers have been trying to resolve the issues.
”We are trying to determine what assets are in the trust and hopefully that will be the end of it,” he said. “If it turns out there is stuff missing or the questions aren’t being answered, then the lawsuit will continue.”
That lawsuit also has been assigned to Judge Riley following the recusal or requests by lawyers for five other judges to step aside. No upcoming hearing has been scheduled in that matter.

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South Florida Check Fraud Victim Suing Wells Fargo Claims Bank Has No System to Track Who Cashes Checks


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South Florida Check Fraud Victim Suing Wells Fargo Claims Bank Has No System to Track Who Cashes Checks

Dr. Luis Fabelo says he lost close to half a million dollars and bank let it happen

(see related story here —

Willard Shepard

Dr. Luis Fabelo says he’s the victim of check fraud and claims his bank, Wells Fargo, has no policy in place to verify who cashes checks and has filed a lawsuit. Det. Marcos Rodriguez also comments. For its part Wells Fargo said, “We deny the claims and will vigorously defend ourselves in this lawsuit.” (Published Friday, Sept. 6, 2013)

South Florida dentist Dr. Luis Fabelo says he lost “close to half a million dollars,” and thinks what happened to him can easily happen to others.

Fabelo said he’s the victim of an alleged fraud involving one of his former employees, and claims one of the area’s biggest banks doesn’t have procedures in place to stop her or anyone else.

Fabelo said he discovered that former employee Elizabeth De Leon was allegedly stealing hundreds of his checks, putting them in Wells Fargo ATM machines, depositing the money into her own accounts and cashing in.

Fabelo said he started taking a close look at his surveillance cameras when a patient alerted him that he never got credit for a payment he made.

“That led me to look at my surveillance camera and that’s when I saw the payment being taken by my former employee,” he said.

The woman the dentist saw on camera was De Leon, who is now facing charges of grand theft and organized fraud.  Police and Dr. Fabelo said she kept under the radar for months stealing checks that were clearly made out to the doctor, but deposited them in ATM machines at Wells Fargo — which Fabelo says let her put the money into her accounts.

“It shocked me that anybody can do that. Just imagine I write you a check.  Your purse gets stolen and that check can get deposited anywhere and it will go through,” Fabelo said. “Apparently there’s no way that Wells Fargo checks the checks.”

Fabelo said De Leon was part of his team and attended social functions – all the while she allegedly was deleting records that would have clued him in. He said no one at Wells Fargo was checking the ATM deposits.

“All this technology is great but it also has its drawbacks and these are the drawbacks,” Miami-Dade Police Det. Marcos Rodriguez said.

Detectives said that when De Leon stopped working for Dr. Fabelo that didn’t stop her from committing the same fraud at another dentist’s office.

Fabelo said when he asked the bank to give him the thousands stolen back they wouldn’t.  So now he’s suing in federal court alleging that “Wells Fargo has no system, policy, and/or procedure in place to verify the depositor/account holder, was entitled to cash the checks.”

His suit added that were it not for the “deficiencies in Wells Fargo’s ATM deposit procedures, Ms. de Leon would not have been able to deposit (i.e., steal) checks that had been made out to Dr. Fabelo and…his dental practice in her personal account.”

“I think it’s the banks responsibility to check,” Fabelo said.

For its part Wells Fargo said, “We deny the claims and will vigorously defend ourselves in this lawsuit.”

Police said the convenience of ATMs – and banking using smartphones — comes with a price.

“The quicker you can access your money, the quicker that other people can access the money from your accounts also. So it’s like a double-edged sword,” Rodriguez said.

The doctor’s lawsuit also said that Wells Fargo has intentionally deprived him of his funds.

De Leon is pleading not guilty to the charges and her attorney said he is just starting to build her defense.

Experts say in the big picture the message is to keep a close eye on your accounts, and there’s something to be said for a teller looking someone in the eye and asking for a driver’s license.

 Content retrieved from:

California Woman Convicted of Embezzling $365k from Santa Barbara Employer — 5 Year Prison Sentence

Officials say Kim Herman manipulated the records system to cover up third-party checks she wrote over seven years totaling $365,000

A woman convicted of embezzling $365,000 from her Santa Barbara employer was sentenced to five years in prison on Friday by Santa Barbara County Superior Court Judge Clifford Anderson.

Kim Herman, 52, pleaded no contest to grand theft by embezzlement with a special allegation of excessive loss — more than $200,000. She worked for local prosthetic and cosmetic dentist Dr. Marc Alexander for nine years, and bank records show she stole money from him during seven of those years, according to Senior Deputy District Attorney Brian Cota.

Alexander and his office manager were alerted to the thefts when Herman’s bank called to question her deposits of third-party checks in March 2010. Cota said she had found a way to manipulate the dentist office’s record system to bypass security and alter financial records so that accounts never showed a deficit, then wrote checks to herself totaling about $4,000 a month.

Cota said such long-term embezzlement cases are often prompted by opportunity, not necessity, and the District Attorney’s Office is taking a strong stance with cases in which the person is in a position of trust. Herman essentially doubled her income to live beyond her means, according to Cota.

Judge Anderson ordered Herman to pay $365,000 in restitution, but Alexander may never see it. Cota said the ruling will get transferred to a civil judgment so she could owe some money if she gets a well-paying job, but there are no assets to seize — the debt on her house is more than it’s worth because of the market.

Cota said he is seeing more and more embezzlement cases in which the perpetrator is in a position of trust — employees, family members and elder abuse cases — and advises everyone to have two sets of eyes looking over all financial transactions.

In court Friday morning, Alexander explained how Herman had joined his private practice in 2002, soon after he started it.

“She seemed to be a model employee, working hard, appearing to be loyal and staying late with me while I worked hard, long hours to make the practice flourish,” Alexander said.

He said he was bewildered over why the business wasn’t making a decent profit margin, and he had to borrow money every year to meet his tax burden. But he trusted her like a family member.

“Now at 52, I am still in debt, without any retirement fund and no college fund for my three children,” Alexander said.

At his Coast Village Road office, he and his office manager have cleaned up the records system and now would notice if even a dime went missing, but “the damage is done.”

Alexander said he has no feelings of joy or closure knowing Herman is going to prison and can’t believe she was “so deliberate and so calculating for so many years.”

Herman will serve half-time and will be eligible to be released after 2½ years.

“What this woman has done has and will have an everlasting effect on my life, family, work and retirement years,” Alexander said.

Herman’s attorney, Adam Pearlman, asked the judge for the lowest term of sentencing since she admitted guilt early on, but Cota’s arguments won out. Herman tried to minimize her crime and only admitted guilt when “she knew her scheme was discovered,” he said.

Anderson did delay the sentence for two months because Herman’s daughter is recovering from a hand transplant at UCLA Medical Center, and nurses there asked for Herman’s presence and support.


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