By Happy Carlock
Marilyn Dudley was charged with 24 counts of embezzlement last year after she stole about $157,000 from Collierstown Presbyterian Church. Over the course of 12 years, she took from the Presbyterian Women’s funds, the church’s annual dinner funds and the memorial funds that she managed. While Dudley sits in prison, her former congregation is still recovering from the loss, The Rev. Skip Hastings says.
Betsy Cribb contributed to this story.
By Betsy Cribb
“This whole story is the story of a small town that is so loving and trusting …. That’s how we all got into this mess, basically,” says local business owner Stephanie Wilkinson.
And it was a big, expensive mess.
In a little more than six months, starting in August 2008, Lexington native and bookkeeper Alison Mutispaugh managed to steal more than half a million dollars from nine Lexington businesses, including Wilkinson’s restaurant, The Red Hen, Perkins and Orrison, Inc., a survey company, and Schweizer Associates, a local architect.
The numbers recorded in Mutispaugh’s case file at the Rockbridge County Courthouse are staggering: six counts of forgery, nine counts of embezzlement, at least nine victims, and upwards of $553,000 taken.
Rockbridge County Circuit Judge Michael Irvine ordered Mutispaugh to pay that amount in restitution and sentenced her to nine years in prison with 10 years of supervised probation, according to court documents. She never finished serving her sentence.
The wounds the case left are still raw. Of the business owners we contacted, only Wilkinson would talk openly about it. One business owner was reduced to tears by the request.
The sense of betrayal by Mutispaugh was one factor.
“I felt sad and a little betrayed,” Wilkinson said. “I don’t think I felt as bad as some people must have who really had their livelihoods threatened by this. But it just felt tremendously sad and confusing …. ‘What were you thinking and why did you do it?’”
But her victims also said they were concerned for Mutispaugh’s family: Mutispaugh died in jail in Roanoke in 2010 after her conviction in Rockbridge County.
She was in the Roanoke jail because her conviction in Lexington triggered a probation violation. She had been convicted in Roanoke in 1995 of embezzling $200,000.
“It feels a little bit like a community tragedy in that she is a product of our town,” said Wilkinson. “She was given a second chance by our town, and she just failed us and failed herself miserably.”
The numbers and court documents don’t tell the whole story, says Amy Gianniny, Mutispaugh’s former employer.
“There are faces and emotions behind the numbers and print that you read,” Gianniny, who now works as a director of property management in Virginia Beach, wrote in an email. “While difficult and financially devastating, I feel that my family’s story has a continued happy ending. I will tell you that we were fortunate to live in a community that recognized our struggle and continued to give their support and send business.”
But others, including Mutispaugh’s family, are still struggling.
“Alison’s actions hurt many innocent people, including her own family,” said Mutispaugh’s family in an email. “Despite her crimes, Alison was still a loving mother and daughter who is greatly missed. We continue to grieve and feel a deep sense of loss as a result of her death.”
Architect Heidi Schweitzer said she feels that pain, too.
“It was about so much more than the lost money,” she said.
Hendley Badcock and Krysta Huber contributed to this story.
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.”
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.
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.”
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.
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.
