NEW YORK (CNNMoney) — Grisha Stpanov opened a credit card, charged up $20,000, but never paid it back.
That’s because Stpanov doesn’t exist.
Stpanov, or at least his credit profile, was the creation of Arman and Wachagan Hovhannisyan, two brothers from California who were accused of scamming 21 banks and the three major credit reporting bureaus by inventing hundreds — possibly thousands — of fake identities, and charging $500,000 on fraudulent credit cards.
While it may sound like the plot of a Hollywood heist movie, anyone who understands how credit works can easily game the system.
Even after the worst financial crisis since the Great Depression, banks are still doling out credit cards to any borrowers who look good on paper — even when that’s the only place they exist.
And the Hovhannisyan brothers are proof positive that most banks are still very susceptible to fraud.
How they did it
It all started when the Hovhannisyan brothers joined forces with a man named Jamal Hyde, who worked in a dentist’s office extending loans to patients and then reporting payments to Experian, one of the three major credit bureaus.
According to the government complaint filed in California federal court, which summarized the investigation, the brothers, along with Hyde, made up hundreds of fake social security numbers to establish false identities. The men then began reporting loan information and on-time payments for fictitious dental services to Experian.
Once the fake credit profiles had high credit scores, the men opened credit cards and took out loans, fooling issuers like Bank of America, Capital One , Wells Fargo , US Bank , Chase and Discover. In all, the government estimated that the men duped at least 21 financial institutions.
At first, they paid off the balances on time to improve the fake scores. Eventually, they ended up with hundreds of cards with a combined $500,000 credit limit, which they used to pay their own bills and purchase two luxury automobiles, federal documents show.
The Hovhannisyans were eventually caught by the FBI. After pleading guilty to lesser charges, they were both sentenced to more than 20 months in prison for bank fraud and must each pay restitution of $486,143. They entered prison in March.
Hyde is scheduled to appear at his sentencing in May.
How they got caught
About a year into the scheme, Experian flagged the fake accounts, saying the loan amounts seemed unusually high for dental services and that the geographic distribution of the patients was also unusual.
A spokesman for Experian said the company did carefully vet the dental practice involved in the case, and worked with law enforcement as soon as Experian became aware of the scam.
“In [this case], the dentist’s office involved was a legitimate business, which hired a rogue employee who reported the account data in question,” he said.
The three men likely picked the social security numbers at random and simply made up names, addresses and dates of birth, according to the case documents.
(Even if a social security number is already in use, if the name and other information doesn’t correspond when a credit bureau receives it, a new profile can be created.)
When government agents received a search warrant to check the homes of the three men, they found hundreds of documents with account numbers, drivers licenses, social security numbers and other personal information relating to the many identities they created.
The fact that the scheme went on for a year means that it probably could have continued a lot longer if the men had been a little more careful, said John Ulzheimer, personal finance expert at SmartCredit.com.
“They got greedy,” he said. “They were smart, but not smart enough — if they used modest credit lines and were more geographically sensitive, they could have kept it going.”
Why it could happen again
While this is considered a “victimless crime” since most of the “individuals” defrauded didn’t exist, (though the government believes several of the identities did belong to real people), the banks ultimately recoup fraud losses from their customers, said Ulzheimer.
“The takeaway from this case is that the system isn’t fool proof,” said Ulzheimer. “It can be manipulated. So it’s crucial that the credit bureaus do a good job making sure that folks who have credit profiles and access to reporting information are legitimate.”
But the job of the credit bureaus is to report the information given, not necessarily to take additional measures to determine its accuracy, said Jay Foley, founder of the Identity Theft Resource Center.
“The credit reporting agency may or may not realize there’s fraud, but they usually won’t do anything about it. Why would they? That’s not their job,” said Foley.
The banks disagree.
“Banks rely on the credit reporting, so they need to count on it being reliable,” said John Hall, spokesman for the American Bankers Association. “The weakest link in this case seems to be the credit reporting folks, because the product we get from them is only as good as it is accurate.”
While Experian said it typically alerts lenders to potential fraud, a spokeswoman from Wells Fargo said the bank doesn’t receive proactive alerts from credit bureaus. Instead, fraud risks are flagged through internal tools, network providers like Visa and MasterCard, merchants and customers.
A spokeswoman for Discover said the company advises merchants to use security processes to prevent fraud.
Capital One and US Bank could not be reached for comment, and the other major banks named in the complaint declined to comment.
“Our country still has no method of defining exactly who the customer is, how honorable the business reporting information is, or how accurate the information on the report is,” Foley said.
Creating better fraud prevention systems would be expensive, and consumers would likely end up paying, he added.
Experian said cases like this are rare. But if a more secure system isn’t developed, similar schemes could easily happen, Ulzheimer warned.
“These guys are almost trailblazers, they’ve proven the concept works, so now it’s just a matter of someone coming along and creating 25 more human beings and improving the process,” he said.
Content retrieved from http://money.cnn.com/2011/05/03/pf/credit_card_fraud_identity_theft/
Jamal Hyde release conditions:
UNITED STATES OF AMERICA v. JAMAL HYDE JAMAL CLIFFORD HYDE; JAY HYDE; JAMAL DANIELS; JC
Social Security No. 2 6 0 0 (Last 4 digits)
JUDGMENT AND PROBATION/COMMITMENT ORDER MONTH DAY YEAR
In the presence of the attorney for the government, the defendant appeared in person on this date. May 25 2011
Nina Marino (Name of Counsel)
X GUILTY, and the court being satisfied that there is a factual basis for the plea.
NOLO CONTENDERE NOT GUILTY
There being a finding/verdict of GUILTY, defendant has been convicted as charged of the offense(s) of:
Possession of at least 15 Counterfeit and Unauthorized Access Devices in violation of 18 U.S.C. §1029(a)(3) as charged in Count Seven of the Eight-Count First Superseding Indictment.
The Court asked whether there was any reason why judgment should not be pronounced. Because no sufficient cause to the contrary was shown, or appeared to the Court, the Court adjudged the defendant guilty as charged and convicted and ordered that: Pursuant to the Sentencing Reform Act of 1984, it is the judgment of the Court that the defendant is hereby committed to the custody of the Bureau of Prisons to be imprisoned for a term of:
Five (5) years on Probation under the following terms and conditions:
The first twelve (12) months of probation shall be spent in a Residential Re-entry Center;
The defendant shall comply with the rules and regulations of the U. S. Probation Office and General Order 05-02;
The defendant shall refrain from any unlawful use of a controlled substance;
During the period of probation, the defendant shall pay the special assessment and restitution in accordance with this judgment’s orders pertaining to such payment;
The defendant shall apply all monies received from income tax refunds, lottery winnings, inheritance, judgments and any anticipated or unexpected financial gains to the outstanding court-ordered financial obligation;
The defendant shall not obtain or possess any driver’s license, Social Security number, birth certificate, passport or any other form of identification in any name, other than the defendant’s true legal name; nor shall the defendant use, for any purpose or in any manner, any name other than his true legal name or names without the prior written approval of the Probation Officer; and
The defendant shall cooperate in the collection of a DNA sample from the defendant.
It is ordered that the defendant shall pay to the United States a special assessment of $100, which is due immediately.
It is ordered that the defendant shall pay restitution in the total amount of $120,000 pursuant to 18 U.S.C. §3663A to victims as set forth in a separate victim list prepared by the probation office which this Court adopts and which reflects the Court’s determination of the amount of restitution due to each victim. The victim list, which shall be forwarded to the fiscal section of the clerk’s office by the probation officer, shall remain confidential to protect the privacy interests of the victims.
Restitution shall be due during the period of probation, at the rate of $100 per month or 10% of defendants’s gross monthly income, whichever is greater, and shall begin within 30 days from the pronouncement of judgment.
If the defendant makes a partial payment, each payee shall receive approximately The defendant shall be held jointly and severally liable with co-defendants Wachagan Hovhannisyan and Arman Hovhannisyan for the amount of restitution ordered in this judgment. The victims’ recovery is limited to the amount of their loss and the defendant’s liability for restitution ceases if and when the victims receive full restitution.
Pursuant to 18 U.S.C. § 3612(f)(3)(A), interest on the restitution ordered is waived because the defendant does not have the ability to pay interest. Payments may be subject to nd delinquency pursuant to 18 U.S.C. § 3612(g).
The defendant shall comply with General Order No. 01-05.
All fines are waived as it is found that the defendant does not have the ability to pay a fine in addition to restitution.
It is recommended that the Bureau of Prisons conduct a mental health evaluation and provide all necessary treatment.
On Government’s motion, all remaining counts are ORDERED dismissed as to this To the extent defendant retained any rights to appeal, defendant is advised to file a notice of appeal within fourteen days.
Bond exonerated upon checking into the Residential Re-entry Center.
In addition to the special conditions of supervision imposed above, it is hereby ordered that the Standard Conditions of Probation and Supervised Release within this judgment be imposed. The Court may change the conditions of supervision, reduce or extend the period of supervision, and at any time during the supervision period or within the maximum period permitted by law, may issue a warrant and revoke supervision for a violation occurring during the supervision period.
U. S. District Judge
It is ordered that the Clerk deliver a copy of this Judgment and Probation/Commitment Order to the U.S. Marshal or other qualified
Clerk, U.S. District Court May 25, 2011 By Kendra Bradshaw Filed Date Deputy Clerk
The defendant shall comply with the standard conditions that have been adopted by this court (set forth below).
STANDARD CONDITIONS OF PROBATION AND SUPERVISED RELEASE
While the defendant is on probation or supervised release pursuant to this judgment:
The defendant shall not commit another Federal, state or
10. the defendant shall not associate with any persons engaged in criminal activity, and shall not associate with any person convicted of a felony unless granted permission to do so by the probation officer;
the defendant shall not leave the judicial district without the written permission of the court or probation officer; the defendant shall report to the probation officer as directed by the court or probation officer and shall submit a truthful and complete written report within the first five days of each month; the defendant shall answer truthfully all inquiries by the probation officer and follow the instructions of the probation officer; the defendant shall support his or her dependents and meet other family responsibilities; the defendant shall work regularly at a lawful occupation unless excused by the probation officer for schooling, training, or other acceptable reasons; the defendant shall notify the probation officer at least 10 days prior to any change in residence or employment; the defendant shall refrain from excessive use of alcohol and shall not purchase, possess, use, distribute, or administer any narcotic or other controlled substance, or any paraphernalia related to such substances, except as prescribed by a physician; the defendant shall not frequent places where controlled are illegally sold, used, distributed or
11. the defendant shall permit a probation officer to visit him or her at any time at home or elsewhere and shall permit confiscation of any contraband observed in plain view by the probation officer;
12. the defendant shall notify the probation officer within 72-hours of being arrested or questioned by a law enforcement officer;
13. the defendant shall not enter into any agreement to act as an informer or a special agent of a law enforcement agency without the permission of the court;
14. as directed by the probation officer, the defendant shall notify third parties of risks that may be occasioned by the defendant’s criminal record or personal history or characteristics, and shall permit the probation officer to make such notifications and to conform the defendant’s compliance with such notification requirement;
15. the defendant shall, upon release from any period of custody, report to the probation officer within 72-hours;
16. and, for felony cases only: not possess a firearm, destructive device, or any other dangerous weapon.
The defendant will also comply with the following special conditions pursuant to General Order 01-05 (set forth below).
STATUTORY PROVISIONS PERTAINING TO PAYMENT AND COLLECTION OF FINANCIAL SANCTIONS
The defendant shall pay interest on a fine or restitution of more than $2,500, unless the court waives interest or unless the fine or restitution is paid in full before the fifteenth (15th) day after the date of the judgment pursuant to 18 U.S.C. §3612(f)(1). Payments may be subject to penalties for default and delinquency pursuant to 18 U.S.C. §3612(g). Interest and penalties pertaining to restitution , however, are not applicable for offenses completed prior to April 24, 1996.
If all or any portion of a fine or restitution ordered remains unpaid after the termination of supervision, the defendant shall pay the balance as directed by the United States Attorney’s Office. 18 U.S.C. §3613.
The defendant shall notify the United States Attorney within thirty (30) days of any change in the defendant’s mailing address or residence until all fines, restitution, costs, and special assessments are paid in full. 18 U.S.C. §3612(b)(1)(F).
The defendant shall notify the Court through the Probation Office, and notify the United States Attorney of any material change in the defendant’s economic circumstances that might affect the defendant’s ability to pay a fine or restitution, as required by 18 U.S.C. §3664(k). The Court may also accept such notification from the government or the victim, and may, on its own motion or that of a party or the victim, adjust the manner of payment of a fine or restitution-pursuant to 18 U.S.C. §3664(k). See also 18 U.S.C. §3572(d)(3) and for probation 18 U.S.C. §3563(a)(7).
Payments shall be applied in the following order:
1. Special assessments pursuant to 18 U.S.C. §3013;
2. Restitution, in this sequence: Private victims (individual and corporate), Providers of compensation to private victims, The United States as victim;
4. Community restitution, pursuant to 18 U.S.C. §3663(c); and
A former office manager of a small dental practice in Mason City, Iowa, who stole nearly $500,000 from her employer over the course of almost a decade, was sentenced yesterday in federal court in Cedar Rapids.
Pamela Harris, age 58, from Mason City, Iowa, was convicted of Wire Fraud. In a plea agreement, Harris admitted she was a trusted employee of the dental practice for approximately 21 years, from about 1993 until 2014. During this time, she had sole responsibility for the practice’s day-to-day finances. She was fired in 2014 after her fraud was discovered.
The two dentists that formed the practice authorized the creation of rubber stamps bearing their signatures to pay for legitimate expenses. However, the dentists always required Harris to obtain authorization before using the rubber stamps on a check to pay a bill. At no time did the dentists authorize Harris to create checks and use their rubber signature stamps to pay for her personal expenses without their knowledge.
From at least July 2005, and continuing through about May 2014, Harris defrauded the dentists and their practice. Harris used the rubber signature stamps of the dentists without their authorization to create forged checks drawn on the practice’s bank account. Harris forged checks made payable either to herself or to others, including credit card companies to pay for Harris’ personal expenses. Harris also maintained and used various credit card accounts she had opened in the name of the dental practice to pay for personal expenses without the authorization of the dentists.
For example, Harris admitted that, in May 2012, she forged a check bearing the signatures of the dentists to pay for a $4,000 white plastic fence at her home. In total, Harris admitted to stealing at least $491,254.86 from the dentists and their practice.
Harris was sentenced in Cedar Rapids by United States District Court Judge Linda R. Reade. At the sentencing hearing, Judge Reade found Harris’s crime was “a very serious offense” and stressed a number of aggravating factors, including that Harris’s scheme was sophisticated and caused the dentists such a substantial financial hardship that they needed to take out lines of credit. Judge Reade found defendant had “spit in the eye” of her employers. During the hearing, Judge Reade also noted that Harris, through a civil attorney, had offered to repay approximately $100,000 of the stolen money, but only if the dentists would give Harris a good letter of recommendation for another job. The evidence at the hearing showed that the civil attorney wrote a letter stating, “this probably sounds outrageous to ask for a letter but if your client’s [sic] want more money, I think this is the only way.” The dentists declined the offer.
Harris was sentenced to 41 months’ imprisonment. A special assessment of $100 was imposed, and she was ordered to make $491,254.86 in restitution to the dentists. With respect to restitution, Harris will be given credit for approximately $150,000 that she deposited with the Clerk of Court before the conclusion of her sentencing hearing. She must also serve a three-year term of supervised release after the prison term. There is no parole in the federal system.
Harris was released on the bond previously set and is to surrender to the United States Marshal on May 8, 2017, at 10 a.m., in Cedar Rapids, pending her designation to a Bureau of Prisons facility.
The case was prosecuted by Assistant United States Attorney Tim Vavricek and investigated by the Federal Bureau of Investigation and the Mason City Police Department.
ATLANTA – Linda Schrenko personally ordered others to fraudulently endorse checks to her campaign, according to a witness in Ms. Schrenko’s federal corruption trial Monday.
The witness offered the first testimony of the former state school superintendent personally directing parts of the complex scheme she in which she is charged with embezzling $600,000 in federal funds entrusted to the state Department of Education.
Shawn Neal, a onetime office director for Ms. Schrenko’s daughter, Dr. Katherine Cooper, said the former superintendent and deputy Merle Temple showed up at their Augusta dental office one day and began persuading employees to help fill out the checks, which until that point had no payee listed.
After the employees’ names were added to the checks, they were asked to endorse the backs, Ms. Neal said. She said she signed checks made out to herself and her husband, and was assured by Ms. Schrenko and Mr. Temple that the transfer was legal.
Ms. Neal said she never expected or received any money from the scheme, but was nervous about signing checks when she didn’t know what she had done to “earn” the money. Ms. Schrenko assured Ms. Neal she would later earn the income through a phone survey about the gubernatorial bid, in which Ms. Schrenko was running.
“She explained to me that it was kind of like I was working for the money, but I would not receive any,” she said.
The survey never took place, Ms. Neal said.
Prosecutors say the checks were later cashed and funneled into the 2002 campaign. In all, similar arrangements allegedly made at her daughter’s office generated more than $61,000 for the campaign, the government says.
Prosecutors allege it was all part of a plan to steal more than $600,000 in federal education grants to fuel the political ambitions of Ms. Schrenko and the businesses of South African businessman co-defendant Stephan Botes, whose employee Peter Steyn is also standing trial.
The $590 “focus group” checks such as those Ms. Neal said she endorsed came from companies owned or linked to Mr. Botes, according to testimony.
Ms. Schrenko also filled out a check for an employee who wasn’t present, Ms. Neal said.
“I saw her sign at least one of the checks,” Ms. Neal said.
She said she noticed Ms. Schrenko signing the check because the former superintendent had to be corrected on the spelling of the employee’s name.
It was the first testimony directly connecting Ms. Schrenko to some of the most serious allegations in the 48-count indictment.
During cross-examination, Ms. Schrenko’s attorney, Pete Theodocion, asked a series of yes-or-no questions, getting Ms. Neal to say that Ms. Schrenko never lied about where the money was going and that the ex-school chief maintained that the phone “focus groups” would take place.
Also Monday, former software executive Johnathan Turner wrapped up his testimony after about three days on the stand.
The defense grilled Mr. Turner on his plea deal. Mr. Turner pleaded guilty to structuring $16,000 worth of financial transactions, a fraction of the total $614,000 that Ms. Schrenko, Mr. Botes and Mr. Steyn are accused of stealing.
Mr. Turner, who said he was directed by Mr. Botes, carried out the complex series of wire transfers, cash exchanges and other transactions that prosecutors allege kicked nearly half of the money back into Ms. Schrenko’s gubernatorial campaign.
Mr. Theodocion said that the $16,000 amounted to just 2.5 percent of the total money involved.
“So you got a 97.5 percent discount, didn’t you?” Mr. Theodocion asked.
Mr. Turner explained that the guilty plea mentions the $16,000 was part of a broader pattern.
Sometimes being too trusting can end up costing you a lot of money.
Medford dentist Sandra Carmeci found this out to the tune of more than $160,000 after her bookkeeper reportedly forged checks and racked up credit card bills in the office’s name over the course of several years.
Medford financial detectives believe Jodi Lynne Setzer, 42, of Central Point, made off with hundreds of thousands of dollars from small businesses in Medford, Phoenix and Rainier by ingratiating herself with the owners.
Winning their trust turned into a lucrative scheme after Setzer allegedly began financing her lifestyle, which included building a pool in her yard and buying clothes, with allegedly embezzled funds, police said.
“Unfortunately, it’s this trust that makes people victims,” Medford police Sgt. Brent Mak said.
Carmeci employed Setzer as her bookkeeper for nearly 10 years. During that time, the two became close, Carmeci said.
“I knew her kid and her family,” she said. “It’s been a difficult year. The deception is the hardest thing, when you find out a friend is not a friend.”
Carmeci became suspicious when some red flags appeared in the practice’s business accounts. A check of the books turned up about $80,000 in embezzled funds siphoned off the business and into Setzer’s wallet.
“At first I didn’t even want to call the police because I knew her and her kid so well,” Carmeci said. “We eventually worked out a deal where she paid me back.”
However, more and more losses were found over time, which eventually added up to more than $160,000, Carmeci said.
The last straw came when Carmeci found that thousands of illegal painkiller prescriptions were collected by Setzer. Carmeci called the police after that discovery.
Meanwhile, Stephen Petersen, a Rainier attorney, was digging through his own books and finding close to $300,000 in losses. He, too, had hired Setzer as a bookkeeper for his law business.
“Honestly, I don’t know how much she got me for,” Petersen said. “I just knew that I should have been doing better than I was. Come to find out, I was losing a lot of money.”
Detectives also contacted the Phoenix-based Noel Lesley Event Services, where Setzer had worked as a bookkeeper for a few months in 2011. In that time, police allege, Setzer wrote several fraudulent checks and made unauthorized fund transfers, with a loss of $39,200.
Financial detectives believe all of this could have been avoided if the business owners had installed a checks-and-balances system in the bookkeeping process.
“You never want just one person handling your finances,” Mak said. “And if you do, then you want to have regular, random audits of the books to see if everything is copacetic.”
Both Carmeci and Petersen said they never noticed the money disappearing from their businesses because the thefts were made gradually, over a period of years. In the end, it added up.
“When you’re running a practice and have a family, you sometimes don’t have time to look closely at the books,” Carmeci said. “But I won’t make that mistake again.”
Setzer faces a number of felony charges, including 10 counts of aggravated theft and first-degree theft. She is scheduled for a pretrial hearing on March 18 in Jackson County Circuit Court
Content retrieved from http://www.opb.org/news/article/bookkeeper-bags-nearly-half-a-million-dollars-police-say/
Embezzler gets three years for scheme
A Central Point bookkeeper was sentenced to three years in prison and was ordered to pay back more than a quarter-million dollars she embezzled from local business owners who entrusted her while unwittingly fueling her lavish lifestyle.
By MARK FREEMAN
A Central Point bookkeeper was sentenced to three years in prison and was ordered to pay back more than a quarter-million dollars she embezzled from local business owners who entrusted her while unwittingly fueling her lavish lifestyle.
Under a plea deal, Jodi Lynne Setzer, 42, pleaded guilty Monday in Jackson County Circuit Court to two counts of aggravated identity theft, six counts of aggravated theft and two counts of first-degree theft stemming from two different cases.
In addition to the prison sentence, Judge Lorenzo Mejia ordered Setzer to serve two years’ probation and to pay more than $263,000 to the bilked business owners, who include a local event planner and a dentist who considered her a good friend.
Setzer was taken into custody immediately after the brief 11 a.m. hearing.
Most embezzlement cases like these are tied to people with drug, alcohol or gambling problems, but those vices were not in Setzer’s background, Jackson County Assistant District Attorney Jeremy Markiewicz said outside of court.In Setzer’s case, she skimmed money from her employers to live a few notches above what she could earn legitimately, Markiewicz said.
She had a child at one time in a Medford private school and had a pool built in her backyard, according to investigators.
“It was feeding a lifestyle that she really didn’t have enough money for,” Markiewicz said.
“In a lot of these cases, you have people who tend to have their vices,” he said. “She’s not the typical person to do this.”
However, Setzer’s case started as a drug investigation in July 2012 when the dentist for whom she worked as a bookkeeper suspected Setzer was using the dentist’s identity to obtain fraudulent prescriptions for the drug hydrocodone, commonly known by the trade name Vicodin.
Investigators later learned through the Oregon Prescription Drug Monitoring Program that she had forged about 150 prescriptions for about 7,800 hydrocodone doses.
When she and husband Jason Setzer were arrested two weeks later, police found no illegal prescription drugs in their possession, so their case was handled as theft and record tampering, Markiewicz said.
Investigators discovered Setzer used electronic transfers from her employer’s account to pay her personal bills, investigators said.
That employer alone saw almost $205,000 siphoned from her business account by Setzer between April 2007 and April 2012, according to prosecutors. Setzer worked for that dentist for 13 years, prosecutors said.
“She was stealing money from a lot of people for a lot longer time than she was getting hydrocodone,” Markiewicz said.
Setzer’s bank records also revealed that she stole money in similar fashion from two other victims, identified by investigators as a local event planner and a Rainier attorney.
Jason Setzer has an Aug. 13 court hearing scheduled for a change of plea in his case. He faces four counts of aggravated identity theft for his alleged part in the prescription medication fraud, court records show.
Content retrieved from http://www.mailtribune.com/article/20130625/News/306250332
WHITE PLAINS – Acting Westchester County District Attorney James A. McCarty announced that Cheryl Higgins, age 51, of Mohegan Lake, was arraigned on Aug. 4, 2016 on a felony complaint charging her with one count of Grand Larceny in the Second Degree, a class “C” Felony.
McCarty said during the period between Dec. 18, 2007 and March 5, 2015, the defendant, the former office manager for David Sandak, D.D.S. of Advanced Periodontics and Implant Dentistry of Westchester, stole in excess of $500,000 from her employer.
She accomplished this by opening an unauthorized business credit card, according to McCarty, and using Dr. Sandak’s personal credit card accounts.
The defendant proceeded to pay for her own personal expenses using Dr. Sandak’s funds and to purchase items for herself and her family without permission or authority to do so.
The defendant’s bail was set at $100,000.
Charges were subsequently dropped by the District Attorney due to lack of evidence.
OLYMPIA — An Olympia dentist is suing a receptionist and a bookkeeper who used to work for him, alleging that they stole an estimated $800,000 from his practice. A separate criminal investigation involves $80,000 in possible embezzlement, but prosecutors say that number could grow much higher.
Prosecuting Attorney Joseph Wheeler confirmed Wednesday that there is a criminal investigation of alleged embezzlement from Dr. Donald Niemann’s dental practice. The two former employees are identified in Niemann’s lawsuit as Bobbi Current, 50, and Kelli Flynn, 44.
The case has been referred to the prosecuting attorney’s office, but criminal charges have yet to be filed, Wheeler said.
Current worked as a receptionist at Niemann’s dental practice from 1994 to 2007, and Flynn worked as a bookkeeper there from 1996 to 2006, according to Niemann’s suit.
Current could not be reached for comment Wednesday night. Flynn said in a phone interview Wednesday that she used to work for Niemann but left to take another job. She said she wasn’t aware of any investigation. “I don’t know what you’re talking about,” Flynn said. “I guess I would have no comment whatsoever.”
Practice since 1975
Niemann has had a dental practice in Olympia since 1975. He said he thinks the embezzlement started around 2000. He said he learned of it through an audit.
Niemann said the alleged embezzlement is “deeply disappointing” and declined further comment.
According to the suit, Current and Flynn took money from Niemann’s practice and “made efforts to disguise and hide these actions from plaintiffs.”
This year, a local couple, Lori and Michael Doughty, pleaded guilty to multiple felonies after they were accused of embezzling about $1.9 million from Fisher Jones Family Dentistry in Olympia. Lori Doughty was sentenced to 10 years in prison, and Michael Doughty was sentenced to 17 months. Both were ordered to pay restitution.
People who work in offices where there are a large number of financial transactions, such as dental offices, might think they can embezzle without being caught, Wheeler said.
Niemann’s lawsuit seeks repayment of funds.
Content retrieved from The Olympian, September 12, 2007
Longtime Richmond dentist Edward D. Gardner Jr. trusted his close friend and business partner, David B. Kagey, “as much as I trusted anybody.”
“I thought he was my best friend,” Gardner testified Thursday in Chesterfield County Circuit Court. “I loved him like a brother. I trusted him implicitly.”
The two men and their wives traveled and took vacations together as their business relationship evolved over a decade. Their bonds of friendship seemed only to grow as Gardner hired Kagey to oversee his successful dental practice on Forest Hill Avenue and then help develop a lucrative side business that brought them additional financial rewards.
To Gardner, it now seems largely a mirage.
For at least five years, Kagey methodically and with no apparent regret stole hundreds of thousands of dollars from his best friend and confidant until Gardner’s practice nearly collapsed. Employees’ salaries had to be cut, along with the number of days the practice could operate. Three of the four dentists were let go, leaving only Gardner.
In a bit of irony, the ongoing theft forced Gardner to lay off even Kagey — a decision that Gardner said he deeply regretted at the time.
“It seemed that we should have been doing better than we were,” Gardner testified. “But we seemed to be falling further and further behind in paying our bills.”
Before Gardner and his daughter discovered the theft, Kagey had siphoned off at least $422,000 between Jan. 1, 2006, and Dec. 31, 2010. A forensic accountant hired by Gardner believes the loss totaled as much as $750,000.
Kagey’s “lies, deceit and longtime betrayal” — as Chesterfield prosecutor Larry S. Hogan described it — culminated Thursday in a three-year prison term for Kagey.
Judge Harold W. Burgess Jr. sentenced Kagey, 57, to a total of 40 years in prison with 37 years suspended on four felony counts of embezzlement, to which Kagey had pleaded guilty in September. At Hogan’s urging, Burgess deviated up from state sentencing guidelines, which called for probation and no incarceration — largely because Kagey had no criminal record.
The theft, Burgess said, “represents a continuous pattern of deceit” that was made worse by the “unusually close relationship” between Kagey and his victim.
But the judge did give Kagey credit for living a law-abiding life tarnished by one mistake, and successfully raising two children with his wife of 30 years. At one point, all of them stood in support of him. “It’s sad to see a man like you before me,” the judge said.
The judge ordered Kagey to pay $439,191.89 in restitution to Gardner, which includes about $16,000 Gardner collectively paid to his daughter and the forensic accountant to unravel the theft. When Kagey is released at age 60, he must repay a minimum of $1,000 a month.
Aside from the theft, Kagey “has had an otherwise exemplary life,” defense attorney G. Manoli Loupassi said, and has at all times admitted to his “guilt, his embarrassment and his shame.”
The attorney explained Kagey’s thievery as “stealing to pay” for a lifestyle that was beyond his middle-class means, and “trying to be something he’s not.”
But Hogan described Kagey as a callously deceptive man who “fidgeted like a 3-year-old” when caught in lies during questioning by a Chesterfield detective. When Gardner’s dental practice was on the verge of insolvency, Hogan noted, Kagey admonished employees to cut back on basic supplies — while he used stolen funds to play country club-level golf and spend $17,000 at Paper Moon, a topless club in South Richmond.
Hogan said Kagey had none of the usual vices — gambling, alcohol or drugs — that would explain why he stole such vast sums. “It was all spent frivolously,” the prosecutor said.
July 18 2014–WALLA WALLA — A former Walla Walla University finance professor and self-employed bookkeeper will spend time in federal prison on a charge of wire fraud in connection with the theft of more than $800,000 from a local dentist.
Dana G. Thompson of College Place was sentenced in U.S. District Court in the Tri-Cities this week to serve 18 months in prison.
Thompson taught finance at the Seventh-day Adventist university in College Place for 15 years and kept books for about 13 years for Walla Walla Dental Care owner Dr. Dan Laizure.
Thompson pleaded guilty in April and in May told the Union-Bulletin there were extenuating circumstances in the case, but did not give additional details.
The theft from Laizure was carried out by writing unauthorized checks from the dentist to himself, banks and other people in guise of insurance company refunds, according to court documents. Upon deposit, those checks electronically debited Walla Walla Dental care’s account.
In addition to his prison sentence, Thompson was ordered to pay $823,832 in restitution. Laizure is to be repaid $773,832, while $50,000 will go to Traveler’s Insurance for costs associated with Laizure’s investigation of the loss of money.
Thompson has handed over $34,000 from the sale of his home and a gold coin collection, according to court documents.
Court documents from his sentencing hearing Tuesday state Thompson will be on probation for three years following his release from prison. He will have to make all financial information available to his probation officer, including authorization to conduct credit checks and see federal income tax returns. Thompson also must disclose all financial assets and liabilities to the supervising officer, and he cannot sell or give away an asset without court approval.
As well, Thompson cannot incur any new debt, open lines of credit or enter into any financial contracts without permission from his probation officer, sentencing documents said.
Authorities may search him, his home, office or vehicle at any time during his probation, and he must complete a mental health evaluation and follow certain treatment recommendations.
Thompson has waived his right to appeal. The court recommended he serve his sentence at the federal prison in Sheridan, Ore.
Laizure said Thursday he refuses to be “bogged down” with the incident, and is looking forward.
“This is out of my hands,” the dentist said. “I have way too many things to think about for the future.”