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Unwilling or unable? The problems with paying restitution

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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.

Pink-collar prosecution: How to handle female embezzlers

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By Happy Carlock

They’re slow, surreptitious and deceptive. Instead of using violence, they gradually gain the trust of their employers, only to commit some of the most expensive crimes in Virginia.

Female embezzlers are draining small businesses, churches and other organizations that entrust these women with their finances. Lawyers say women are increasingly becoming the perpetrators of financial crimes because they tend to hold bookkeeping and money-handling jobs.

“Embezzlement is one of those lines of cases where you see a lot of female defendants,” Rockbridge County Chief Deputy Commonwealth’s Attorney Chris Billias said. “I would say . . . of the cases [we see], embezzlements probably are heavily weighted toward female offenders.”

Last year Marilyn Dudley was sentenced to three years and eight months in prison for embezzling $157,000 from Collierstown Presbyterian Church.

Patricia Truslow was convicted in 2002 of 28 counts of embezzlement. As bookkeeper for North Fork Lumber & Log Homes, she stole more than $468,000 from her employer from 1999 to 2001. Michelle Lawhorn was convicted in 2009 of embezzling $170,000 from the same business.

Alison Mutispaugh was also convicted in 2009 of nine counts of embezzlement after she stole more than $553,000 from nine Lexington businesses.

Lexington Attorney David Natkin. Photo courtesy of David Natkin.

Lexington Attorney David Natkin. Courtesy of David Natkin

Billias says that in the last 10 years, he has had 62 defendants convicted of felony embezzlement. About two thirds of those – 42 – were women. Lexington attorney David Natkin says that every embezzlement case he has handled in the past five years has involved women.

Buena Vista has also seen its fair share of pink-collar crime. Women are frequently the defendants in the three to five embezzlement cases Commonwealth’s Attorney Chris Russell sees each year.

And the Rockbridge area isn’t the only hotbed of recent pink-collar crime. Staunton Commonwealth’s Attorney Ray Robertson, who handles about a dozen embezzlement cases each year involving both men and women, says the amount of money stolen by embezzlers has gone up. Many of the embezzlers get behind on their finances, he said, and have relatively easy access to a lot of money in their jobs.

In Augusta County, Commonwealth’s Attorney Lee Ervin handles half a dozen cases each year. He has also noticed an increase in the amount of money taken. And he said women tend to be behind the big numbers.

“In most of our bigger embezzlement cases when you get into the tens of thousands of dollars, those seem to have been women within the past few years,” Ervin said.

Checks and imbalances

Embezzlement is committed in a number of ways, but it often involves female bookkeepers and other women in money-handling positions, prosecutors say. Many women will write checks using their business’s money to pay their personal bills. They list the payments in the company’s financial records as business expenses.

Some embezzlers forge the signatures of their employers on checks and cash them, which can result in forgery charges and uttering charges. Forgery involves signing someone else’s name on the check. Uttering is telling the bank that the signature is legitimate.

Often, the embezzler will take a credit card belonging to the business she works for and use it for her own purchases. In Dudley’s case, she opened a personal bank account using Collierstown Presbyterian Church funds. She used that money mostly to pay her mortgage, but also to buy herself clothing and jewelry, according to the Rockbridge County Sheriff’s Department.

“When you do that, you can also be charged with things like credit card fraud, credit card forgery, things like that,” Ervin said.

Sometimes in a cash business, however, a woman will embezzle money that comes in before it makes it to the cash register.

Laying down the laws

While most jurisdictions consolidate theft charges into a single statute, Virginia treats embezzlement and larceny as separate charges.

Embezzlement cases can be tougher to prove than simple theft, prosecutors say. In a theft, it’s clear that the thief takes what he or she should not have had access to. But because a bookkeeper or other employee may be entrusted by a business owner with accounts, checkbooks and even cash, things get complicated, Russell said.

Buena Vista Commonwealth's Attorney Chris Russell. Photo courtesy of Peter Jetton

Buena Vista Commonwealth’s Attorney Chris Russell. Courtesy Washington and Lee University Communications

“It’s not like a homicide or a sexual assault or a DUI where it’s all done right away and an arrest is made,” Russell said. “These cases take time to build up and a lot of interviews and looking at documents, and then  typically we will present the indictment to the grand jury after that.”

When a business or organization reports an embezzlement case, the Virginia State Police are ready to call in forensic accountants. But sometimes, business owners choose not to report embezzlement in order to avoid publicity.

Even when a business cooperates, investigators face challenges when multiple people have access to a business or organization’s money.

“Under Virginia law you have to eliminate everybody but the guilty party,” Ervin said. “Sometimes that’s really tough figuring out who actually took the money.”

Guilty as charged

The key to embezzlement is that the defendant had legal access to the money or property stolen, but not legal ownership of it. For an act of embezzlement to be considered a felony, the value of the property stolen must be $200 or more. If less than $200 is stolen, then the defendant can be convicted of embezzlement as a misdemeanor.

“You often times have full confessions. So a lot of times it gets to be more of a sentencing case than on guilt or innocence once you’ve figured out what’s going on.” – Lexington Attorney David Natkin

“Usually the ones who are embezzling from department stores, let’s say like JCPenney, they don’t usually embezzle large sums of money,” Ervin said. “You’re talking maybe a thousand or two. Whereas you get a bookkeeper or an accountant with a doctor’s office or with some other type of professional business, we’ve had cases where they’ve embezzled, 20, 30 40, 50 thousand [dollars].”

The amount an embezzler takes determines whether she gets a lighter sentence for a misdemeanor or a heavier one for a felony. A misdemeanor is punishable by a maximum of 12 months in jail and a fine of up to $2,500. An embezzlement of $200 or more is considered a felony. The accused faces one to 20 years in prison and must pay restitution.

Prosecuting pink-collar criminals might not look all that different on paper from the process that violent criminals go through. But female embezzlers often experience more regret, which affects how the trial plays out.

Most female embezzlers express remorse and even relief when their crimes come to light, defense attorney Natkin said. So when the cases go to court, the emphasis is different than in some criminal cases.

“You often times have full confessions,” Natkin said. “So a lot of times it gets to be more of a sentencing case than on guilt or innocence once you’ve figured out what’s going on.”

Unlike violent career criminals, most pink-collar embezzlers have clean records.

“They have financial pressures on them and just have a lot going on in their lives,” Natkin said. “But the courts sure do look dimly on this.”

Natkin said embezzlement is repeatedly referred to as a ‘breach of trust.’

“It’s not just some stranger robbing you, but someone who you deal with, talk to, and work with on a daily basis.”

Hendley Badcock, Betsy Cribb and Krysta Huber contributed to this story.