Meet the Trading Trust for the Till team

Screen Shot 2015-05-20 at 5.41.20 PM Name: Hendley Badcock
Class Year: 2016
Majors: Journalism and English
Hometown: Columbus, Ga.
Screen Shot 2015-05-20 at 4.45.03 PM Name: Happy Carlock
Class Year: 2015
Majors: Journalism and Spanish
Hometown: Dallas, Texas
Screen Shot 2015-05-20 at 1.11.09 PM Name: Betsy Cribb
Class Year: 2015
Majors: Journalism and Art History
Hometown: Charleston, S.C.
Krysta headshot Name: Krysta Huber
Class Year: 2016
Major: Business Journalism
Hometown: Westfield, N.J.



The 4-1-1 on pink-collar crime

By Krysta Huber

The likes of Bernie Madoff and Enron executives made “white-collar crime” an everyday term in the English language. But even before these men were entangled in their own elaborate schemes, women were committing several types of financial crimes that, increasingly, have come to be identified with them.

The term “pink-collar crime” was coined in the late 1980s by criminologist Kathleen Daly. Pink-collar crime, according to Daly’s definition in a 1989 article in Criminology, a peer-reviewed journal that focuses on crime and deviant behavior, refers to female office workers in low- to mid-level positions — bookkeepers, managers, clerks — who steal money from their employers.

So what exactly might a pink-collar criminal be charged with? Embezzlement, larceny, fraud? What form of sentence and punishment are involved if she is convicted? What are the relevant laws in Virginia and how are they different from other states?

And why does pink-collar crime seem to get less attention from the public and news media? The “Trading Trust for the Till” team answers those questions in this terminology guide.

1. What kind of offenses do pink-collar criminals typically commit?

Pink-collar criminals usually focus on several crimes involving stealing property or money. Such offenses include burglary, embezzlement, fraud, larceny and robbery. According to the Virginia State Police, a stolen property offense is committed by “receiving, buying, selling, possessing, concealing or transporting any property with the knowledge that it has been unlawfully taken.”

2. I’ve heard financial crimes sometimes referred to as “crimes of opportunity.” What does that mean?

Crimes of opportunity aren’t limited to pink- and white-collar crimes. What the phrase really emphasizes is access. Rockbridge County Sheriff’s Deputy Tony McFaddin uses the example of a drug dealer to describe it: “If you have the access to drugs and then have access to the market, you’re going to sell [drugs].” The same goes for pink-collar criminals: Women are hired for office positions where they manage the books, write checks and keep records, giving them not only access to the money, but also the ability to hide what they are doing with it.

3. What are pink-collar criminals typically charged with?

Embezzlement and forgery appear to be among the most common offenses:

Embezzlement occurs when an offender takes “money, property or some other thing of value entrusted to her care, custody or control,” and uses it for her own purposes, according to Virginia law.

Forgery is often committed by writing checks. Forgery occurs when someone changes, copies or imitates something “without authority or right, with the intent to deceive or defraud by passing the copy or thing altered or imitated” as something that’s real, according to state law.

4. What about larceny? Doesn’t that simply mean stealing? Why aren’t pink-collar criminals commonly charged with larceny?

Larceny is theft, yes, and embezzlement is a form of larceny. But in Virginia, embezzlement occurs when the thief had some form of control or care over the property that was taken. Buena Vista Commonwealth’s Attorney Chris Russell says embezzlement is essentially taking money or property with permission — because the individual had been entrusted with its care — and then using it for the wrong purposes. Larceny, however, occurs when a person takes money without permission and uses it for whatever purpose he or she chooses.

Because pink-collar crimes often involve women taking from people they know in a small business, church or other organization, we considered the breach of trust to be a critical component. So we focused most of our research and reporting on embezzlement.

5. How is embezzlement punished in Virginia?

Criminal charges are categorized as either a misdemeanor or a felony. The difference in the case of theft is the value of what’s stolen. A person is charged with misdemeanor embezzlement when she has embezzled less than $200 and felony embezzlement when she has embezzled more than $200. A person charged with misdemeanor embezzlement is subject to up to one year in prison, while felony embezzlement is up to 20 years in prison.

6. If convicted, is the pink-collar criminal required to repay any of the money or property stolen? If so, how much?

Yes. The amount the pink-collar criminal is required to repay is known as restitution. The actual dollar amount is based on the amount stolen, though it’s rarely, if ever, the full amount. According to Russell, restitution is a condition of the suspended portion of the defendant’s sentence. If the defendant fails to repay, she is subject to further jail time. But Russell says it’s usually a method of last resort: A judge will first sit down with the pink-collar criminal to discuss why she isn’t on track with her payments. If that conversation is ineffective, the judge may order her back to prison for 30 to 60 days, just to send a message.

7. Do pink-collar criminals actually serve much prison time?

The amount of time spent in prison for many criminal offenses in Virginia is determined by the Virginia sentencing guidelines. The guidelines don’t cover every offense, but larceny and embezzlement are included. Unlike in other states, circuit judges in Virginia are not bound by these guidelines. Rather, they are required only to review them before sentencing. Russell said the sentencing guidelines follow a point system, which is based on statistical data from past convictions for similar crimes. The guidelines weigh the nature of the crime, the defendant’s criminal history, factors about the crime itself and the defendant’s background. In his experience with embezzlement cases, Russell said, the defendant’s criminal history seems to play a significant role in the number of years the defendant will spend in jail.

Russell also says restitution — specifically whether it’s been paid prior to sentencing — can affect a defendant’s sentence. He says defendants who pay their restitution in full prior to sentencing often spend less time behind bars. So defense attorneys will push their clients to pay back as much money as possible before sentencing.

8. Why does pink-collar crime seem to get less attention from the public and news media?

Experts and law enforcement we interviewed all pointed to the perception that pink-collar crimes are victimless. Pink-collar crimes don’t have the same physical evidence of harm in the way a murder or an assault case does. So many pink-collar crime stories don’t sound appealing enough for the evening news or the front page of the newspaper. But all of our experts agreed that that perception is wrong: The victims in these cases are the business owners and their families, who are in jeopardy of losing their livelihoods at the hands of a single employee.

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.”