Unwilling or unable? The problems with paying restitution

By Hendley Badcock

If you catch a person stealing from you, you probably expect her to pay you back, whether or not you take the theft to the police.

But in embezzlement cases, trying to ensure that offenders pay back what they stole is a big issue.

“It takes years and years,” Buena Vista Commonwealth’s Attorney Chris Russell said.

And that’s probably the best a victim can hope for. In many cases, victims never see a cent of what they lost.

Restitution – paying back what the embezzler took – is almost always part of an embezzler’s sentence. Typically, an offender will get a prison sentence, but some of that commonly is suspended.

Once the offender is released, she enters probation, during which she is expected to pay restitution to the victim, often in monthly increments. If the offender does not pay, she risks going back to prison and serving the remainder of her sentence.

“They’ve made this promise to make their victim whole,” Staunton Commonwealth’s Attorney Ray Robertson said. “If they don’t live up to that promise, they go back in.”

Prosecutors and legal experts cite a number of reasons why offenders often fail to pay restitution, despite the threat of never-ending probation and imprisonment.

For one, the courts realize that some offenders cannot pay back what they took.

“If you’re unable to pay, you really can’t do anything about it,” Dean of Washington and Lee University’s School of Law Nora Demleitner said.

When it comes down to sending those embezzlers back to prison, most judges drag their feet.

Judges want to get the offender back on track. They want the restitution paid, and they understand that keeping the offender in prison won’t solve the problem.

But it’s hard for anyone to find a job after a felony conviction, particularly after serving time in prison.

The offender might have the ability and experience to make a good wage, Demleitner said.

“But are you going to hire her as a bookkeeper?” she asked. “No, and neither will I . . . . It’s going to be hard to get a job even as a stocking assistant at Kroger for this person. So how is she going to be paying anything back?”

Prosecutors know the difficulties involved with restitution. They often negotiate with offenders and with the court.

“A lot of times if the amount of embezzlement . . . isn’t so great, we’ll work them, especially if they did it out of need to feed their family and clothe their family and things like that,” Robertson said.

For example, Robertson said he does not mind reducing the charge to a misdemeanor if the amount stolen isn’t that much over $200.

“[That] makes it a lot easier to get and maintain a job in the future if they pay that restitution,” he said.

In other instances, judges might even arrange a work-release program from prison for offenders who are not paying.

“This is more typical with men, for some reason,” Russell said. “The jail takes them out to the truck stop and they do maintenance or whatever out there and then the money that they earn goes directly into the court’s account.”

Women might not get the same opportunity, though, because work-release programs often require hard physical work.

“You think of storage facilities, warehouse facilities, and much more likely they’ll hire men for these types of jobs,” Demleitner said. “That would be my suspicion — for relatively not-so-educated people with a criminal record, there are still more jobs for men in that area.”

Most embezzlers have to work to make restitution because they have nothing left of the money they took by the time they are caught. They seldom buy houses or other expensive items that can be confiscated or resold.

When the embezzler makes no effort at all, it is not unheard of for her to be taken to prison again.

“[For] the ones that do go back, it’s not for very long,” Russell said. “It might be for 60 days just to send a message like, ‘You haven’t done nearly enough, made nearly enough effort, so you’re going to have to go back for a short time and then get going.’”

So, who is keeping track of what is and isn’t paid?

Oversight of restitution falls outside the law, Demleitner says.

“The law just says you have to pay restitution and if you don’t pay restitution, it can be a violation of your probation or parole condition,” Demleitner said. “Everything else is an administrative structure.”

An offender makes payments to the clerk of the court, not the victim. Her probation officer checks in with the offender to make sure she is making payments.

Either the probation officer or the victim can report a violation in restitution. But it is unclear how many of these reports are made and if anyone responds to them.

“I’m not surprised that some offices are really on top of it and others probably don’t quite know what they’re doing,” Demleitner said.

Unpaid restitution is a problem acknowledged nationwide. Demleitner said one attempt to mitigate the problem was known as day fines. Tried by four states in the 1980s, it mimicked programs begun in Sweden and Germany.

Demleitner said that a person’s day fine is tied to his or her income level.

“It actually becomes feasible for people to pay the fines and the restitution,” she said. But Americans’ notion of equality makes them leery of sliding-scale paybacks.

“I mean, I’m charging someone who makes a million dollars a much higher fine, for example, than I’m asking from someone . . . who makes $10,000 a year,” Demleitner said. “On some level, the paying would be on the same, but the perception clearly is very different.”

And the victim might still see only a small fraction of what was taken if the embezzled amount was large and the offender’s income is small.

Demleitner says a better solution might be a national victims fund.

“You have people pay fines in part to [the fund],” she said. “Then you can equalize between people who can’t get anything and people who can get something.”

For now, the court and the victims will have to accept how much or how little offenders are able to pay.

Need, after all, is what drives many of these women to embezzle in the first place.

“I see a lot of people who are up against it financially and think that somehow they’ll be able to repay,” Robertson said.

Betsy Cribb and Krysta Huber contributed to this story.

More than the money: What determines an embezzler’s sentence

By Hendley Badcock

When Patricia Truslow embezzled $468,000 from North Fork Lumber & Log Homes in Goshen over the course of two and a half years, she was sentenced to 28 years in prison. She served 12 of those years and was released in the summer of 2014. To date, she has not paid back a penny of what she stole.

When Michelle Lawhorn embezzled about $170,000 over five years from the same lumber company, she got 20 years. She served a little over a year and spent another year under house arrest. Lawhorn has paid owner Will Harris around $1,400, a small fraction of what she still owes.

Prosecutors, judges, defense attorneys and experts agree that, even with state and federal sentencing guidelines, the terms recommended and those imposed for embezzlers, including female embezzlers, can look arbitrary.

The goal of implementing sentencing guidelines in Virginia in 1991 was to decrease disparities in felony punishments. But, in looking at Truslow’s and Lawhorn’s cases, those discrepancies still exist.

“You cannot tell what a sentence means,” Nora Demleitner, Dean of Washington and Lee University’s School of Law, said about the North Fork embezzlers’ punishments.

How did 28 years turn into 12 and 20 years turn into one, Demleitner asked.

Lawyers say that, among other things, sentences are a function of:

  • State guidelines that give relatively heavier weight to an offender’s prior criminal record than the amount of money embezzled.

  • A scoring system that penalizes women based on their sex. Judges and prosecutors don’t have a solid explanation for that. But they suspect it’s because women are more likely statistically to repeat economic crimes.

  • The expectation that a shorter sentence will help ensure that the embezzler will pay restitution. They seldom do, court officials acknowledge.

  • The prosecutor’s ability to “bundle” the charges against a defendant. A prosecutor may combine a series of small thefts over a six-month period to make one more serious charge, for example.

  • The attitude of the victim toward his or her embezzler. Often, when a church or small business is involved, the victim knows the criminal well, and might feel a mix of betrayal and sympathy.

The American Bar Association is urging the federal courts to adopt a new set of sentencing guidelines for embezzlers. The organization argues that the guidelines should consider the offender’s motive, effort to mitigate harm and monetary gain compared to the victim’s loss. The Bar Association also suggests looking at victim impact, including noneconomic suffering like emotional trauma.

Demleitner has no doubt that those changes would make a substantial difference in the way Americans think about and handle economic crimes.

“We’ve gotten used to very high sentences for white-collar offenders, and in part people really wanted that,” Demleitner said. “But now people go to prison for 25 years for not even personally enriching themselves . . . . We’ve reached a point where there’s a lot of unhappiness by the people in the system who are really seeing what’s happening.”

The Virginia Criminal Sentencing Commission’s guidelines for embezzlement do not consider the criteria being pushed by the ABA. Rather, they focus on the amount stolen and, even more, on the offender’s criminal record.

The goal of the guidelines is to make sentencing consistent for people who commit similar crimes and who have similar backgrounds. There are guidelines for everything from traffic violations to drug offenses to murder and rape.

Does money matter?

Buena Vista Commonwealth’s Attorney Chris Russell says one of the unique things about the embezzlement guidelines, compared to the burglary or robbery guidelines, is that they consider how much money was stolen.

But other attorneys are quick to point out that the amount of money isn’t nearly as big a factor in embezzlement sentences as people might think.

Here’s why:

For embezzled amounts over $10,000, penalty points are added in figuring the recommended sentence. For cases involving sums below that, the offender often spends very little if any time at all behind bars, Augusta County Commonwealth’s Attorney Lee Ervin says.

The higher the embezzled amount goes, the more penalty points the guidelines add.

But the piling on of points stops at $75,000, Russell said.

“There are no more categories higher than that.”

Russell said one of his recent cases involved a woman who stole $400,000.

“Her guidelines were about the same as someone with her record that only embezzled $75,000,” Russell said. “[Seventy-five thousand dollars] is a lot of money, but she was someone that stole multiple times that.”

What seems to be considered more heavily is the offender’s criminal record.

Judging by the past

A criminal record, especially a violent one, is a big factor in a recommended sentence.

Augusta County Commonwealth's Attorney Lee Ervin

Augusta County Commonwealth’s Attorney Lee Ervin. Courtesy of Lee Ervin

“If a person has no criminal history, and only embezzles a few hundred or a thousand dollars, usually [she is] looking at straight probation,” Ervin said.

But an offender can expect to serve some time if she has a criminal history or embezzles tens of thousands of dollars or more, he said.

An embezzler’s criminal record is often used to predict recidivism – the likelihood that he or she will commit a crime again. According to the National Center for State Courts and the Virginia Criminal Sentencing Commission, people convicted of larceny are the most likely of all nonviolent offenders to backslide.

“It doesn’t surprise me that women would recidivate more, especially with property crimes,” Demleitner said. “Once you’re out, you have more financial problems than you do beforehand, to some extent.”

Demleitner said that in some circumstances having a record doesn’t necessarily mean that person is a greater risk to society. A record can reflect things beyond recidivism, including growing up in a high-risk environment.

“If you have a record or not depends on where you live; it depends on how you grow up,” she said. “Record can reflect real culpability, but it can also just reflect kind of bad luck in birth.”

The female penalty  

The Virginia sentencing guidelines use a tool called the Nonviolent Risk Assessment that is supposed to help the judge determine whether an embezzler qualifies for a sentence that will keep her out of prison.

Like the rest of the guidelines, the assessment is scored by a point system. This time, age and gender, plus criminal history, come into play.

Women are penalized just for being female – 13 points compared to nine for men. That’s important, because once an offender racks up 32 total points or more, he or she is no longer recommended for a nonprison sentence.

Lawyers and legal experts aren’t sure what makes gender a factor. But they did say the guidelines are driven by data and statistics collected by the sentencing commission.

“I’m guessing that statistics have shown men are more likely to re-offend, relapse on drug cases when they’re ordered to be clean after a drug conviction,” Russell said. “Women are maybe more likely to re-offend on stealing cases.”

Russell said he’s seen a pattern in which women who get into trouble with the law often have trouble controlling their spending. Men tend to not have control over other things, like drugs, alcohol or violence.

In 2002, when Truslow was convicted, the guidelines penalized the offender only for being male. There was no check box for being female.

Weighing the range

Once the offense, criminal history and nonviolent risk are calculated, the guidelines offer a range of sentences for each offender.

Judges can still decide not to follow the guidelines if they file a statement of their reasons. But data from the Virginia Criminal Sentencing Commission show the larceny guidelines had the highest rate of compliance by judges, at 82 percent. 

“On property crimes . . . the guidelines usually come up with a pretty reasonable recommendation,” Ervin said.

But even with the range of sentences and the discretion judges can employ, Demleitner sees problems with the system.

“Some judges may feel that they should always be on the low side; some may always be on the high side,” Demleitner said. “The broader your range, the more inequality you’re even hiding just by saying, ‘Well, they’re sentencing within the range.’”

Beyond the guidelines

Truslow and Lawhorn both stole from the same business. And, in both cases, the judges went outside the guidelines.

Truslow spent 12 years in prison, two years over her maximum recommended sentence. Lawhorn spent a little over a year, nearly a year and a half less than her minimum.

While the sentences themselves for the two women did not differ drastically from the recommendations, the time each served did.

Lawyers say those two cases show the most frequent reasons judges go outside the guidelines.

The judge’s reasons for lowering Lawhorn’s sentence are not in her case file, but the judge’s statement for increasing Truslow’s sentence cited her previous embezzlement and larceny conviction.

In 1991, the Waynesboro Circuit Court convicted Truslow of one count of larceny after bailment, which means that her stealing did not have to be proven as trespassing.


“I’ll take a very different look at a person who’s done it out of necessity than I will at a person who’s done it solely out of greed.”– Staunton Commonwealth’s Attorney Ray Robertson


Her six-month sentence was entirely suspended, and she went straight into three-years’ probation.

In 2002, the day before Harris went to the police about Truslow, a small Fishersville company that had filed bankruptcy pressed charges against her.

Five months before Rockbridge County Circuit Court convicted Truslow of embezzlement in the Harris case, the Augusta County Circuit Court convicted her of embezzlement, forgery, credit card fraud and obtaining money by false pretense in the Fishersville case.

According to the August County Circuit Court online database, Truslow’s five-year sentence was suspended.

By comparison, Lawhorn had no prior record.

Shortly after her conviction, Truslow filed an appeal of her sentence.

Truslow argued that her sentence surpassed those for violent criminals and drug offenders, even though she was well within the range for a nonprison sanction according to the guidelines.

Truslow’s criminal record and the judge’s referencing her as the “coolest manipulator of the truth” he had ever seen did not paint her as a compelling appellant.

Truslow’s request was denied and her sentence remained.

Although the Virginia guidelines fall short of considering the embezzler’s motive and the crime’s impact on the victim, those factors often make it into courtroom conversation.

“I’ll take a very different look at a person who’s done it out of necessity than I will at a person who’s done it solely out of greed,” Staunton Commonwealth’s Attorney Ray Robertson said.

Often, need or greed tells the judge a lot about culpability.

“You can have someone who takes $500 just because they’re greedy versus somebody who takes $5,000 because they have a sick child,” Demleitner said. “We don’t really care about the loss that they’ve made that much in assessing moral guilt.”

The judge and prosecution might also pay attention to the emotions of the offenders and the victims.

“I see a lot of remorse in embezzlement cases,” Robertson said. “I see a lot of people that are up against it financially and thought that somehow they’d be able to repay.”

Because it involves trust and betrayal, embezzlement can be a very personal crime for its victims.

I’ve seen different emotions from different employers,” Ervin said. “They feel sorry for the victim because they got in such a financial bind. A lot of the victims though have expressed anger at the employees for betraying the trust that they put in them.”

Harris, the owner of North Fork Lumber, said he felt much more sympathy for Lawhorn.

In Lawhorn’s case, he said, he told the prosecutor that Lawhorn had a teenage daughter and being put in jail for a long time wasn’t going to help anyone.

But he felt much more angry toward Truslow, who used Harris’ money to lease cars and homes for herself and her family.

“She had an opportunity to speak [in court] and she just lied continually,” Harris said. “And the judge could see it.”

Although Truslow lost years in prison, Harris and his wife lost years recapturing what had been stolen from their business.

“My business could have easily fallen apart,” he said.

Krysta Huber and Betsy Cribb contributed to this story.

Twice burned, finally shy

By Krysta Huber

When Will Harris, owner and president of North Fork Lumber & Log Homes in Goshen, Va., hired Patricia Truslow as his bookkeeper in 1999, he described her as bubbly and personable.

Harris and his wife, Jane, both liked the new employee and figured her a solid replacement for the company’s former bookkeeper, who had left after accepting another job.

But two and a half years and nearly half a million dollars later, Harris says, he discovered that Truslow’s friendly personality hid a compulsive liar who breached his trust.

It wasn’t until he made plans to buy a new piece of property with what cash he had in his bank account, Harris said, that he realized just how tight North Fork Lumber’s situation had gotten.

“She really set out to destroy my business,” Harris said. “She really thought she was going to bankrupt it, take what money she could, and nobody would ever look back.”

Harris says Truslow embezzled about $468,000 from North Fork Lumber between January 1999 and April 2001.

At the insistence of his wife, Harris said, he finally fired Truslow. But that wasn’t before he says he wrongly laid off two other employees: his forester and his lumber grader.

“I kept looking at [the numbers] and saying, you know, ‘Our inventory cost is too high; our wood cost is too high,’ and ended up firing the forester … basically over the embezzlement,” Harris said. “And he told me, he said, ‘I’m telling you, something else is wrong.’ I didn’t believe him and I fired him.”

As hard as Harris was hit by Truslow, he was reluctant to change his business practices to reflect a distrust of everyone. Less than six years later, that decision cost him again. A second employee, Michelle Lawhorn, embezzled about $170,000 from him between 2007 and 2009 by forging checks, Harris says.

“If somebody wants to steal from you, they’re going to steal from you,” Harris said. “If you’re dealing with a crook, they’re going to be a crook.”

Repeated attempts to reach both Lawhorn and Truslow for comment were unsuccessful. After learning that Lawhorn no longer worked for her most recently known employer, the Trading Trust for the Till team was unable to find her. The only phone number listed for Truslow has been disconnected.

Lawhorn was contacted via social media but she did not reply to any of the team’s Facebook messages. Truslow does not appear to have a social media presence.

The process and the benefits

Harris said the nature of his business allowed Truslow to write herself checks for large dollar amounts without his knowledge. Because lumber is a fairly expensive commodity and the industry is labor-intensive, Harris said, there’s a lot of cash exchanging hands to pay for the goods, services and equipment needed.

Combine that with the extensive privileges Truslow had as a bookkeeper — check-signing authority, sole responsibility for issuing invoices and completing payables — and it’s easy to see how schemes like hers could go unnoticed for months, even years.

“She was writing a check to herself and coding it in the checkbook … that it had been for a load of logs. A load of logs might be $2,000 to $4,000, depending on what kind of material it is,” Harris said. “And if you get in … 15 loads a day, that’s a lot of money going out in a day. So it was very easy for her to sell herself a load of logs that didn’t exist.”

As soon as she was fired, though, Harris says, it didn’t take long to figure out what she’d been up to.

The first of the month came just days later, but, Harris says, he didn’t receive his bank statements in the mail. He called the bank and an employee told him to wait a few days to see if the statements arrived.

Instead, Harris decided to go to the post office to see if anyone had picked up the bank statements in person. Because Goshen is a small town, Harris says, he knew the post office employee would remember if someone had asked her for them.

“[Truslow] came [into the post office] and she said she needed the mail, and she took those and handed the rest of the mail back. She told [the post office employee] to put it back in the box and that somebody else would come down to pick it up later, that she had to go back home,” Harris said. “And that’s exactly what she did. She took the bank statements home with her.”

Truslow was sentenced to 14 years in prison and required to pay nearly $390,000 in restitution, according to her case file.

In a letter written to Circuit Judge George Honts asking him to reconsider her sentence, Truslow argued that the sentence was substantially higher than what was called for in Virginia’s sentencing guidelines, a point-based system Virginia judges consult to determine the appropriate punishment.

But Harris says the judge had his reasons for the sentence imposed, and he vividly recalls what Honts said to Truslow in court on July 3, 2002.

“I’ll never forget what [Honts] said when he turned to [Truslow],” Harris said. “‘In all my years of being a judge,’ – and he was an older judge, he died a few years afterwards – he said, ‘I’ve never met a more cool and calculating criminal than what you are. Because of that I’m going to deviate from the guidelines. The guidelines call for 14 years and I’m going to give you 28. I’m going to make you pull 14 of them.’”

Thirteen years after Truslow was sentenced, Harris says, he hasn’t received a dime from her — and no longer expects to. During the investigation, Harris says, investigators told him that people who commit embezzlement rarely have anything to show for it once they’re caught.

Not believing them, Harris hired his own private investigator see if there were any assets he could claim — even assets he could attach to Truslow’s children.

But Truslow had been a step ahead: She rented or leased everything — cars for her kids, a vacation home in Hilton Head, S.C. for $10,000 a week and a vacation home on Smith Mountain Lake with a boat to match.

“The state police told me as soon as they came and got involved, ‘Don’t expect to get anything because you’re not getting it,’” Harris said. “I didn’t believe that, but after it was all said and done I realized I wasn’t getting anything. There was no stash of any money anywhere.”

What’s more, Harris says, the $468,000 sum Truslow accumulated is only half of what he lost from her embezzlement.

“What most people don’t understand, is well, you lost a half of a million dollars, well you really lost a million because you had a half million say, in your credit line, and that got eaten up,” Harris said. “There’s no money there to work with so now you have to go borrow another half million to stay in business and you end up with a million dollars worth of debt out of the thing.”

Déjà vu

Truslow embezzled more than twice as much from North Fork Lumber as Lawhorn did. But for Harris, the second theft was harder to confront.

Harris says he had only 45 days to turn Lawhorn in to police after discovering she’d been forging his signature on payroll checks. Otherwise, he wouldn’t be able to make a claim on his employee theft insurance policy. Harris waited until the 44th day.

The [Truslow] debacle — I could go in there and fire her because it was you know, an employee-employer relationship: I mean I liked her. We were friends, but there was no closeness there, really,” he said.

“[Lawhorn], I kind of treated as a daughter, or almost. If she needed something, she’d come to me. I gave her advice on lots of things through the years. I didn’t expect this.”

Harris says Lawhorn, whom he hired when she was just 16, worked for the company at the same time as Truslow and witnessed the consequences of her embezzlement.

In fact, Harris says, Lawhorn was responsible for ensuring that the office followed a new system of checks and balances to prevent any employee theft from happening again.

After Truslow was fired, Harris limited check-signing authority to Harris, his wife and his son. He assigned one employee to check writing and another to handling receivables, and he made sure two people were in the office at all times.

But even with those checks in place, Harris says, Lawhorn found a loophole: She could imitate Harris’ signature so well that even he couldn’t tell Lawhorn’s version from his own.

Finding Forgiveness in Hardship

Harris believes from what he knew about Lawnhorn and about Truslow that Lawhorn’s family circumstances were different. Her husband had been laid off a number of times and was frequently between jobs.

Harris said Lawhorn asked him for loans, sometimes as much as $10,000, on more than one occasion. He gave her the money, even though he knew she couldn’t pay it back.

But the gifts from Harris weren’t enough. Lawhorn turned to payday loans to keep her family afloat. But Harris says the payday loans drove Lawhorn into more debt.

A person using payday loans will borrow the amount of his or her paycheck and is expected to pay back the debt with interest when the next paycheck arrives.

But Harris says the interest rates on those loans are so high, in some cases as much as 1,000 percent, that the person falls into a trap where he or she can’t pay anything back.

Harris says he’ll never forget Lawhorn’s expression when he told her he knew she was stealing.

“She looked at [the copies of the forged checks] and it was just like — it was almost the same look Pat had when the judge sentenced her,” Harris said. “I’ll never forget it: The blood just kind of flowed out of her …. From the top down, she got pale — and she [responded in the same way Truslow had] and said, ‘I can’t explain it.’”

Harris says he went to Lawhorn’s family to see if they could pay some of the money back before involving the police. But that route proved unsuccessful and he learned his insurance policy would not cover the full amount of money stolen.

The Rockbridge County Sheriff’s Office began investigating, and Lawhorn was charged. She was convicted of 10 counts of embezzlement on May 9, 2012 and ordered to pay just over $165,000 in restitution.

Lawhorn spent one year in jail and another under house arrest. Eighteen years of the total sentence imposed were suspended.

Harris said he contacted the commonwealth’s attorney before Lawhorn’s sentencing because he knew she had a teenage daughter.

He says he thought it would do more harm than good for her to spend a number of years in jail, during which time she’d be unable to pay restitution.

“I had a different outlook on this one than I did on the first one,” Harris said. “I wasn’t mad ever on this one — I mean as soon as I found out, I was like over it the next day.”

For as financially straining as the cases were for North Fork Lumber, Harris says he learned an important personal lesson.

For the first year after [Truslow was sentenced], I was literally mad with the world — I was mad with everybody I came in contact with,” Harris said. “It took me a little while to realize I had everything that was really important: I had my family; I had my health; my family had their health. We really had everything we needed anyway.”

“It slowed us down [financially] … but in reality, it didn’t make a whole lot of difference, because it’s only money. And you can always make some more.”

Insurance – not the best policy?

By Betsy Cribb

Practically nobody who becomes a crime victim expected it to happen. But people who suffer at the hands of embezzlers are often especially surprised, says Rockbridge County Sheriff’s Deputy Tony McFaddin.

“Embezzlement, by its nature, is a crime that’s done by a person that you have trust in,” McFaddin said. “You have to trust them to let them in to look at your financial documents and have access to your records and personal life …. And they use that [trust] against you to get away with it until that moment when it finally stacks up against them and they’re caught.”

Will Harris, president and owner of North Fork Lumber & Log Homes in Goshen, knows a thing or two about having his trust violated.

Harris has been embezzled from twice, losing, by his calculations, upwards of $638,000 to two former employees.

Harris says that while he remains a trusting person, he now has his own system of checks and balances in place so that he won’t be a victim again.

“I would encourage any employer that has anybody working in their office to make them take a week off,” Harris said, “because [if] anything is [wrong, it’s] probably going to show up in a week. You can’t cover it.”

Gregg Amonette, a partner in the Lexington insurance agency Emrey and Amonette, agrees.

“If a rotten employee goes on vacation and somebody else has to come in and look at the books, that’s an opportunity to maybe figure out what’s going on,” Amonette said.

Amonette-Mug

Local insurance agent Gregg Amonette says insurance isn’t actually the best protection against embezzlement. 
The Rockbridge Report

Harris said business owners should play a bigger role in monitoring their companies’ finances.

“Open your own bank statements – look at the canceled checks, because the checks tell the story,” Harris said.

Special Agent Accountant Susan Jones, who works for the Virginia State Police, said oversight is the key to preventing embezzlement.

“There should be an additional person reviewing all of the banking information, as well as payroll …,” Jones said. “Cash should never be counted by one person alone in a room. There should always be multiple people with their eyes on the cash.”

The Rev. Skip Hastings, minister at Collierstown Presbyterian Church, learned that lesson the hard way when Marilyn Dudley, a congregation member who served as treasurer of three church committees, managed to steal nearly $160,000 before she was caught.

“Marilyn would take Wal-Mart bags with cash and stick them in the back of her car, saying that she would count it later, [that] there was so much money that she didn’t want to have it exposed here,” Hastings said. “[Church volunteers] were saying, ‘That’s a little odd taking the money from here and taking it home.’ And we were concerned about that, but we just went on being a caring, trusting community.”

In addition to oversight, Jones said, insurance is an important protective measure — because once the money an embezzler takes is gone, it’s usually gone for good.

“A lot of times [small businesses] don’t have insurance because they can’t afford it or just don’t think of it,” Jones said.

Before he was the victim of embezzlement, Harris never thought he needed insurance.

“When my insurance agent asked me … ‘Do you want employee theft insurance?’ I said, ‘Is that like tools and stuff?’…. He said, ‘No, it takes care of things like money.’ And I said, “Well I never have any extra money so I’m not worried about anybody stealing from me. And Pat [Truslow] was stealing me blind.”

Dick Emrey, Amonette’s partner at Emrey and Amonette, said that attitude among business owners is common.

“The phones don’t ring off the hook when an article about the Marilyn Dudleys hits the paper,” he said.

Amonette said business owners are more concerned with other liabilities.

“People want to spend as little as possible to insure against the big stuff …. If somebody gets [injured at] their business, [the business owner’s] risk is almost unlimited. It could be hundreds of thousands or millions of dollars, so it’s not hard to talk to people about millions of dollars in liability coverage,” he said.

“But when you think about employee crime, it’s absolutely a finite number. They can only steal as much money as you have.”

Even so, Amonette said, most business owners have insurance policies that protect them against employee dishonesty — but the coverage is usually limited.

“Nobody has ever said to me, ‘I don’t want [employee dishonesty insurance],’ because it is cheap,” Amonette said. “They go, ‘yeah, okay, throw it in there.’ But if you said, ‘You really need a $300,000 limit; that’s going to cost an extra hundred bucks a year, they go, ‘No.’ They meet the minimum.”

In many cases, businesses are required by law to meet that minimum because of government retirement regulations.

“In a small business or a big business, usually, the big pot of money is in the retirement plan,” Amonette said.

When business owners have those plans on behalf of their employees, they are required under the federal Employee Retirement Income Security Act to have insurance that covers at least 10 percent of those total assets.

Amonette said he’s never had a client ask for more than that statutory amount.

“They never say, ‘Gee, if the minimum requirement is 10, give me 20 percent. Never,” he said. “They’re like, ‘I’m going to meet the statutory requirement, and that’s that.’”

But Amonette seems to think that’s okay.

“The best insurance against embezzlement is good bookkeeping and an audit,” Amonette said. “It’s not buying insurance policies.”

Krysta Huber and Happy Carlock contributed to this story.