Big thefts netting small sentences

While working at a mega gardening center in Davidsonville, Virginia Lee Christian doctored the books and skimmed $64,400 from the registers over the course of a year.

After a five-day trial earlier this month in Anne Arundel Circuit Court, a jury convicted Christian of perpetrating a felony theft scheme - a crime that carries up to 15 years in a state prison.

But when Christian, a Davidsonville resident, goes to court Wednesday to be sentenced, state guidelines will recommend Circuit Court Judge Michele D. Jaklitsch order the first-time offender to serve no more than six months in a county jail.

A review of 13 large-scale embezzlement cases successfully prosecuted in Anne Arundel County in the past three years found actual sentences of six months or less are the norm - not the exception. Only five of the 13 defendants received active sentences longer than six months, and only two of them received sentences in excess of 18 months, meaning they were served in a state prison.

"The sentences do not reflect the seriousness of the offenses," said State's Attorney Frank Weathersbee, urging the state Commission on Criminal Sentencing Policy and judges to be harder on embezzlers like Christian, who worked at Homestead Gardens.

The problem, prosecutors said, is that most thieves convicted of stealing from their employers have clean criminal records. They are regular people with families, work histories and roots in the community.

State sentencing guidelines - which utilize a complex formula to determine how long various criminals should spend in jail - favor first-time offenders. On top of that, judges typically are reluctant to throw nonviolent criminals in state prison for fear they will be attacked and victimized.

Kristin Fleckenstein, spokeswoman for the State's Attorney Office, added that fraud cases add an extra wrinkle for judges and prosecutors, who sometimes agree to shorter sentences as part of plea agreements. She noted that most businesses are more interested in getting back their money than sending their former employee to prison.

"If you put someone in jail, how are they going to repay the victim?" she said.

District Public Defender William Davis argued that six months in jail to a person new to the penal system is a significant penalty. Also, he said, the conviction carries with it a lot of shame and embarrassment.

Davis also noted that anyone who receives an extended sentence in a state prison will have a hard time down the road getting a job and repaying their employer.

"How employable is he going to be when he gets out?" Davis asked.

The sentences

Prosecutors this month noted 17 large-scale embezzlement cases of $17,000 or more that were filed Circuit Court in the past three years.

Of those, 13 suspects have been convicted and sentenced, two are awaiting sentencing and two are awaiting trial.

Sentences vary greatly from case to case and judge to judge, but most defendants are incarcerated for less than six months.

Circuit Court Judge William C. Mulford II sentenced one woman in 2007 to 10 years in prison for two theft schemes totaling more than $55,000 in losses. Earlier this year, though - after Patricia Thomas of Lothian served two years and two months behind bars - he ordered her released and suspended the balance of the sentence.

Circuit Court Judge Pamela L. North sentenced another woman last month to 15 years in prison, suspending all but five years. Sandra Kay Oliver of Chester, who was convicted of stealing $90,000 from the Maryland Retailers Association, has appealed her sentence, noting that guidelines called for her to serve no more than six months in jail.

Fraud on the rise?

Employee fraud is a $994 billion problem in the United States, according to the Association of Certified Fraud Examiners. The organization estimated American companies lost 7 percent of their gross revenue in 2008 to all forms of occupational fraud and abuse - up from 6 percent in 2006.

Prosecutors couldn't say last week if fraud is on the rise in Anne Arundel County. Fleckenstein noted that the State's Attorney Office has seen a "steady growth" in the number of economic crime cases in the past five years, but that could be attributed to the office's recent emphasis on the problem. She noted that three prosecutors are now assigned specifically to economic crimes, up from one five years ago.

Nationwide, however, the ACFE said employee fraud appears to be on the rise. According to a 2009 ACFE survey of 501 fraud examiners, 18.1 percent of the examiners saw a "significant increase" in the number of frauds they investigated in 2008. Another 37.3 percent observed a "slight increase."

"While it is too soon to get a clear picture of exactly how much fraud has commenced since the start of the current economic slump, the data provided by survey respondents ... provides a good indication that fraud is indeed on the rise," according to the report, titled, "Occupational Fraud: A Study of the Impact of an Economic Recession."

Victims' wishes

The number of cases where prosecutors actually file charges don't represent all of the embezzlements reported to police.

Tipsters have told The Sunday Capital about at least three fraud cases in the past three months that they say prosecutors are currently investigating or have agreed to pass on in respect of the victims' wishes.

Weathersbee explained last week that victims' wishes play a heightened role in embezzlement cases.

Prosecutors and private investigators can spend months investigating an embezzlement case before even filing charges. After that, it can take another year or two to prepare a case for trial or negotiate a plea agreement.

Weathersbee said if a business wants his office to drop charges or go easy on a suspect in exchange for a five- or six-figure restitution check, he has to listen. The company is the one that uncovered the fraud, and the company is the one that knows how to decipher the books.

"The victim is heavily involved in the prosecution," Weathersbee said. "You have to consider their views."

Still, Weathersbee said he is dedicated to pursuing embezzlers and prosecuting them whenever possible - even if his prosecutors continue to net small sentences: "We will keep trying them and hope some judges see the light."

Change in the air

The state's view of large-scale embezzlements is changing in this era of Bernard Madoff - the convicted Wall Street executive who stole billions from private investors as part of a massive Ponzi scheme.

The legislature this year created three levels of felony theft: one involving thefts from $1,000 to $10,000; one involving thefts from $10,000 to $100,000; and a third involving thefts of $100,000 or more.

The change by the legislature is prompting a change in the sentencing guidelines, which previously treated all thefts of $500 or more the same. If a first-time offender was convicted of stealing $501 or $100,001, the guidelines recommended a sentence between probation and six months.

When the new guidelines go into effect Nov. 1, they will recommend a first-time offender convicted of stealing $10,001-plus to serve up to one year in prison, according to David Soule, executive director of the state Commission on Criminal Sentencing Policy. They will recommend a person convicted of stealing $100,001-plus to serve between two and five years.

But the new guidelines don't go far enough for Weathersbee. He described them as "measly."

"This is a crime where deterrence can actually mean something. Where a long sentence could scare someone," he said.