Both locally and nationally, embezzlement is occurring at high rates in large firms and small; in good times and bad; in all geographic regions, urban and rural, North and South.
Gambling is a primary motivating factor in nearly a third of all embezzlement cases in which a motivating factor can be determined.
In one of most publicized cases in recent Lakeland history, Michelle Popenhagen was convicted of three misdemeanors for embezzling from Save More Food Markets, Inc., of Minocqua. Popenhagen was sentenced to nine months in jail, but the consequences could have been far worse because she was originally charged with felony theft in a business setting, and then with four felony charges in a refiling.
Both nationally and in the Northwoods, an embezzler is more likely to be a woman, in her 40s, and in a position with access to a company's finances, such as an accountant or treasurer or bookkeeper or office manager. She usually acts alone, and won't likely have a criminal past.
The most likely targets are businesses in the financial, insurance and banking sectors, though private small businesses of all kinds are vulnerable and routinely victimized.
1/30/2015 7:30:00 AM Northwoods embezzlers fit the national profile Third in a series
It has been described as financial assassination, but, unlike physical assassination, embezzlement is a saturation crime: The assassins aren't just found atop the grassy knolls; they are everywhere.
Embezzlement these days occurs in large firms and small; it occurs in good times and bad. It occurs in all geographic regions, urban and rural, North and South.
The Northwoods is no exception. Indeed, both the number of embezzlements and the amounts of money stolen in this region over the past decade could be characterized as a crime wave of epidemic proportion.
Except that the epidemic, if that is what it is, is national in scope, according to one of the nation's foremost experts on embezzlement, Chris Marquet, the CEO of the security consulting firm Marquet International, which for six years now has compiled an annual review of national embezzlement data.
"What you're seeing in your corner of the world is what we're seeing around the country," Marquet told The Lakeland Times. "Last year was gangbusters for embezzlement. It's everywhere. and it's a matter of trying to catch it before it gets too out of hand because it just goes on and on and on. It's not something that people just stop doing if they keep getting away with it. It just keeps going."
As happens elsewhere, the attacks are indiscriminate, occurring in larger firms, in small family-owned enterprises and in government entities and nonprofits. And, as also happens elsewhere, those convicted of embezzling draw comparatively light sentences, though some sense a recent shift toward stiffer penalties.
Two northern cases
Two relatively recent local cases demonstrate the magnitude of the crimes, as well the eerie similarities of the embezzlers to national profiles.
Over in Elcho, for example, the former town clerk-treasurer, Melissa Bloechl, was sentenced this past November to a mere three months in jail for embezzling more than $156,000 from the town. She was also ordered to pay restitution and received five years probation.
Think that's light? She was originally charged with 43 felony counts, but 33 were dropped in a plea deal. She could have been sent to prison for 45 years; the prosecution urged that she serve at least one.
Not only was the jail sentence minimal, but the restitution order of $68,271 - insurance covered $75,000 more and she had already reimbursed the town $13,000 - will end with the expiration of her probation, after which it becomes a civil judgment.
That's significant because if she doesn't pay the monthly order during probation, she could go back to jail; that outcome won't exist under a civil judgment.
One northern Wisconsin business owner who was the victim of embezzlement in a case in which the sentencing mimicked the Elcho incident said those two elements - light jail sentences and swapping out restitution orders as a condition of probation for civil judgments - means justice isn't served in many cases.
"It's a huge flaw in the system," the business owner, who asked not to be identified because of the sensitive nature of the case, said. "If they can't pay restitution by the end of probation, then it becomes a civil matter, and they are ordered to pay a ridiculously low amount based on what they can afford, and it's never paid back."
But, the business owner said, employers pay a high price, even if the business has liability insurance to cover employee theft, as was the case in Elcho.
"First, the business is burdened by the amount of work placed on the employer when a case is prosecuted, and many times not all of the theft is covered," the business owner said. "But more than that, employers have to pay the deductible and they pay long term through higher premiums."
Marquet agrees the Elcho sentence seemed extraordinarily light, even by national standards, which are already light compared to other crimes.
"That seems quite lenient in my book," he said. "Three months in jail for stealing over ($150,000) and abusing the public trust, to me that's ridiculously lenient. Just as a nonlawyer and nonprosecutor, but looking at sentencing around the country, based on my analysis, she should have gone away for at least three or four years. Restitution should hang over her head for the rest of her life. She should be barred from any public position in a fiduciary role."
The Elcho case fits the national embezzlement profiles in more ways than just lenient sentencing. For instance, the perpetrator was a woman, which is the case about 60 percent of the time nationally, and Bloechl was in her 40s, which also fits Marquet's national profile.
That's not all, in court, prosecutors acknowledged that gambling drove Bloechl's embezzlement. Gambling is a primary motivating factor in nearly a third of all embezzlement cases studied by Marquet in which a motivating factor can be determined.
In one of most publicized cases in recent Lakeland history, Michelle Popenhagen was convicted of three misdemeanors for embezzling $28,500 from Save More Food Markets, Inc., of Minocqua, The crime was committed in 2003 and 2004, and took nearly 10 years to adjudicate.
In this instance, Popenhagen did land in jail for nine months, but the consequences could have been far worse. She was originally charged with felony theft in a business setting, but the charge was dismissed.
As Heather Schaefer of the Northwoods River News reported, the state Supreme Court determined that Popenhagen's rights were violated when Minocqua police officers received three subpoenas for her bank records without offering a probable cause statement.
But, Schaefer reported, the charge was dismissed without prejudice, allowing the state to refile charges, and it did so in 2010.
This time the state Department of Justice was acting as a special prosecutor for Oneida County, and Popenhagen again faced felony charges. According to the DOJ, the complaint charged Popenhagen with two counts of felony theft and two counts of felony fraudulent writings.
According to the complaint, Popenhagen was employed by Save More as a head cashier until June 2004, where her duties included replenishing the store-owned ATM. Popenhagen was supposed to retrieve cash from the store's safe, record the amount in an accounting journal, place the funds into the ATM and then enter the amount placed into the ATM's keypad, the complaint stated.
But beginning in July 2003 and continuing through mid-June 2004, the complaint alleged, Popenhagen periodically kept some of the funds removed from the safe instead of depositing them into the ATM.
She was charged with the fraudulent writings when she made an entry in Save More's quarterly inventory reports that purported to reflect the actual cash balance in the ATM at the time of the entry, the complaint stated, an entry the DOJ complaint said she knew to be false. Still, in due time, the charges were reduced to misdemeanors.
In this instance, Popenhagen was somewhat younger than the standard-issue embezzler, but many of the other trademarks of embezzlement existed - a woman in a financial position with opportunity, for example. In addition, like many embezzlers before her, Popenhagen had no prior criminal record.
Following the pattern
After reviewing such high-profile cases as the Bloechl and Popenhagen embezzlements, The Lakeland Times began a review of other major embezzlement cases in the Lakeland area.
It didn't take the newspaper long to confirm that embezzlement is as rampant here as it is in the rest of the nation. But, beyond the anecdotal evidence in those two cases, just how do the profiles of local perpetrators and victims stack up against national profiles such as that compiled by Marquet?
To find out, we studied 17 major embezzlement cases in the Northwoods stretching back a decade.
The comparisons are informative, but some caveats are in order. First, the Northwoods' sample is small and thus more prone to being skewed. By contrast, the 2013 Marquet sample encompasses more than 500 instances.
Where possible, we also compare our decade-long data with the six-year aggregate data from Marquet. For the most part, the differences between the six-year aggregate and 2013 Marquet data sets are not significant but including the aggregate data offers a somewhat more apples-to-apples look.
Indeed, the two Marquet data sets reinforce each other. While neither offers a decade-to-decade data comparison, both demonstrate a remarkable consistency in the characteristics of embezzlement across the country and across the years and thus both data sets offer a decent comparison with Northwoods cases.
More important, some statistics are calculated using contextual or speculative judgment, or the data might not be complete, both in the Marquet and local data sets. In rating whether an embezzler had a prior criminal record, for example, such cases as deferred prosecutions were not counted locally, while on the national level, as Marquet observes, information on prior criminal activity is not always available, and not all criminal matters are prosecuted.
To cite another example, gambling as a primary motivating factor was counted when it was obvious from court sentencing and court testimony that gambling was the issue, but that doesn't mean gambling wasn't an issue when the records were silent on the question, and that's also the case with the Marquet data.
Still, even with context, incompleteness, and different date ranges as factors, the data provides useful information, and, indeed, in most cases, the Northwoods' statistics align to the national sample in stunning fashion.
What that tells us is, while anyone can embezzle, and many diverse types of people do, and while any company or industry can be a target, there are some interesting characteristics that stand out, both here and nationally, both now and throughout the recent past.
To wit, the embezzler is more likely to be a woman, in her 40s, and in a position with access to a company's finances, such as an accountant or treasurer or bookkeeper or office manager. She usually acts alone, and won't likely have a criminal past.
The most likely targets are businesses in the financial, insurance and banking sectors, though private small businesses of all kinds are vulnerable and routinely victimized (in the Northwoods, 41 percent of the cases we reviewed were in the nonfinancial sector - small businesses such as restaurants and various service and retail operations, many of them family-owned).
None of which is to say businesses should view their female bookkeepers suspiciously, or use the statistics to profile anyone. Indeed, as Marquet pointed out to The Lakeland Times, the statistics could tell a completely different story.
The preponderance of female embezzlers, for example, is likely due in very large part to the predominance of women in bookkeeping and treasurer positions in small businesses, not to any gender-related basis for embezzlement. In other words, if more men were in those positions, we'd likely see more male embezzlement.
Indeed, more important than gender might be the lack of financial oversight in many small firms, where one person manages the finances with few people, or no one, following up.
That said, here's how major embezzlement cases shape up in the Northwoods. On the matter of gender, in the 17 cases reviewed in the Northwoods, 76.4 percent were women and 23.6 percent were men, compared to Marquet's 2013 national figure of 57 percent women. Over six years of data, women were the perpetrators 61.1 percent of the time nationally.
As on the national scale, the data shows that conspiracy rarely occurred. Most embezzlers acted alone. In the one major Northwoods case where there was a conspiracy involving multiple individuals, three of the four perpetrators were men - again matching the national sample showing that men are more likely to engage in a conspiracy than women, with fewer conspiracies overall (just 15.4 percent in the aggregate six-year data and 18.6 percent in 2013).
As observed, the 40s is an age prone for embezzlement. Nationally, 32 percent of the 2013 cases involved embezzlers in their 40s; in the Northwoods sample, it was 41.1 percent.
The average age in the 2013 national sample was 47.9 years and 47.6 years in the aggregate sample; in the Northwoods review, 43.8. The median age nationally was 47; in the Northwoods, 43.5.
While age and gender were similar to the national profile, so was the position of the person embezzling. The vast majority in both samples worked in financial or accounting positions - 64.2 percent in the Northwoods and 71 percent nationally in 2013 and 68 percent for the aggregate years.
The finance and banking industry itself was the most targeted - 23.5 percent in the Northwoods and 21.4 percent nationally for 2013. Government entities were a double-digit target in both samples as well - 11.7 percent here and 12.6 percent in the Marquet sample.
Nonprofits came under fire in both data sets, slightly higher in the Northwoods at 17.6 percent versus 7.8 percent nationally, but that could be a skewed figure.
Two other comparisons deserve mention. While Marquet rarely posits financial need as a motivating factor in embezzlement - indeed, the desire for a lavish lifestyle seems to be more of a factor - a gambling addiction often plays an underlying role. The cases in the Northwoods bear out that connection: Gambling was cited in 29.4 percent of the cases we studied while in the Marquet sample it was 29.1 percent.
And, as in Marquet, most of the perpetrators had no criminal past. Just 17.6 percent of the convicted embezzlers we reviewed had a serious criminal history; on the national level, Marquet scores that number at between 5 and 10 percent.
Of course, as always, there are faces and stories behind the statistics - both of the perpetrators and of the victims - and there have been judicial attempts to make sentencing more severe here in the Northwoods. We'll take a look at those next.
Richard Moore may be reached at email@example.com.
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