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Authorities: Be watchful of business bookkeeper

District attorney says embezzlement cases increasing in Lodi area

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Posted: Friday, February 11, 2011 12:00 am | Updated: 6:52 am, Fri Feb 11, 2011.

San Joaquin Deputy District Attorney Stephen Taylor hears it all the time, almost exactly the same way: They were like family. We trusted them.

And every time, that was a critical mistake.

Taylor handles embezzlements for the district attorney's office, which have been on the rise just like many other financial crimes during a recession.

"They always occur during recessions or depressions," Taylor said, adding that embezzlements may still happen often during good economic times, but they're easier to hide when the money is flowing.

He said the victims almost always deeply trust their bookkeepers, which is part of the problem. When you give someone complete control of your books, he said, you're asking for trouble.

"They keep doing it until they kill the business or there's no way to ignore what's happening anymore," Taylor said. "We have businesses that go under (after embezzlements)."

Detective Michael Manetti has been investigating embezzlements for the Lodi Police Department for the past three years, and his sentiments are similar. Victims he's seen recently are not financially savvy, so they trust bookkeepers with handling all financial issues.

"It's a good idea for them to either audit the books themselves, or get a third party to do it," as a safeguard, Manetti said.

One of his recent cases was the alleged embezzlement of more than $200,000 from Tokay Glass Co. by bookkeeper Cheryl Jacobson. Taylor said that Jacobson, arrested on Jan. 28, may have stolen more than $400,000 total since 2005.

And in June, 48-year-old Ignacio Barboza was arrested on charges of taking $350,000 from Lodi-based Bokisch Winery.

Although embezzlements can affect any type of business, in the local area, it's small businesses that tend to be hit, and the suspects are almost always women. And according to Taylor, these women have some issues.

"The people are crazy; they're nuts," he said. "Some of them are on drugs, some of them are alcoholics, some of them are gambling addicts."

Aside from what Taylor calls their "psychiatric problems," he also said embezzlers tend to spend their money very frivolously, and Manetti agrees. Manetti said most of the embezzled money gets spent on things like Internet shopping sites or the Home Shopping Network.

Take, for example, the recent case of Brenda Kaye Kemper. A former employee of Big Valley Aviation in Stockton, the Lodi woman admitted in June to taking nearly half a million dollars. The county sheriff's department said she used the money to buy large amounts of jewelry from Home Shopping, and even went to a tanning salon.

"When the sheriff's office did a search warrant on her house, they (removed) five garbage bags worth of stuff," Taylor said. "It's amazing to see how $400,000 can disappear and you have nothing to show for it."

According to Taylor, such actions are an indication of a larger problem: For many embezzlers, their greed stems from a lack of self-control and is reflective of a gluttonous personality.

"They are larger than life. They're very oversized personalities ... in more ways than one," Taylor said. "Have you noticed the figures of some of my defendants? ... A couple of them had gastric bypass (surgeries) and were caught when they took time off to recover."

Most large-amount embezzlements occur over a period of years; Manetti said his recent big cases have averaged at least three years. As the years progress, he said, the suspects start taking larger amounts of money.

Because of the length of time involved, embezzlement cases can be hard to investigate and prosecute. Manetti said a lot of background work must be done even once a suspected embezzler is identified, in order to discover the true amount of money taken.

Once a case is sent to court, prosecutors have a lot of investigating to do themselves. There are different minimum penalties based on the amount of money stolen, so a miscalculation could make a big difference in jail time for convicted embezzlers. Taylor said he remembers one case in which an embezzler pleaded guilty to taking about $10,000, and a week later it was discovered that they had taken $100,000.

"If they plead guilty to (stealing) $5,000, and later you discover it's half a million, generally you're stuck," Taylor said. "You can't go back and redo the case."

There are many steps a business can take to safeguard itself from embezzlement. Taylor and Manetti both strongly advocate getting insurance to protect yourself. Taylor said its important not to let one person have complete control of finances, and to make sure canceled checks and bank statements are mailed to the owner of the business.

"Make sure you're getting financial reports from these people," Manetti said.

"You need a second set of eyes," Taylor added.

If a bookkeeper is secretive about the businesses' finances, or doesn't conduct their work in an open fashion, Taylor said that could be a major warning sign that something is amiss.

"If they're hiding (the books) or they're delaying getting them to you, it could be a sign that they're doing something wrong with them," Manetti said.

"I remember a case where the bookkeeper changed the lock for her office," Taylor said. "That is not a good sign."

Contact reporter Fernando Gallo at fernando@lodinews.com.

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3 comments:

  • Bob Bechill posted at 4:40 pm on Fri, Feb 11, 2011.

    Bob Bechill Posts: 41

    Darn shame these folks decided to embezzle from their employers. The trouble is some of these folks are caught, do time, and then unsuspecting business people hire them again! Fairly easy to do some background checks. When it comes to money, trust no one and get another set of eyes.

     
  • Jay Samone posted at 10:02 am on Fri, Feb 11, 2011.

    Jay Samone Posts: 359

    I agree with your comments JP. How ridiculous for these men to state such "facts" when they are not profilers, nor do these "facts" apply to all embezzlers. Did the reporter just catch them on a bad day or do they really believe this to be true? Good gravy - is our police department really that superficial to assess an embezzler as "fat" and "crazy" woman???????Wow............

     

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