Archive
Former Executive at Gourmet Foods Company Sentenced to 30 Months in Prison for Embezzling Over $1 million from Her Employer
In the Central District of California, a woman was sentenced on February 13, 2012 for embezzling more than $1 million from her employer, a Santa Barbara-based gourmet food company. Lisa Sackie, 48, was sentenced by United States District Judge George H. Wu, who also ordered the defendant to pay $1.1 million in restitution to Future Food Brands, the parent company of Santa Barbara Bay Foods.
Sackie pleaded guilty to two counts of mail fraud in August of 2011, admitting that she wrote company checks to herself and to pay for personal expenses. Sackie pleaded to an information, and subsequently waived her right to a grand jury indictment. Sackie’s decision to plead to an information and waive her right to an indictment likely benefited her in sentencing because she admitted guilt early in the process and saved government resources. In fact, according to her sentencing memorandum and the sentencing guidelines, Sackie was facing a sentencing range of 33 to 41 months. Accordingly, Sackie was sentenced to 33 months in prison, the very bottom of her recommended sentencing range. Although her attorneys’ request for a variance of 33 months of probation was denied, Sackie benefited from cooperating, as reflected in the judge’s determination to sentence her at the bottom of the applicable range.
According to the plea agreement the government agreed to bring no additional charges against the defendant based upon her scheme to defraud her employer. Thus, instead of facing a multitude of fraud counts, Sackie only faced the maximum penalty of two fraud counts. Had Sackie not agreed to a plea agreement early on, the government would have likely convened a grand jury and charged her with a multitude of fraud counts dating as far back as 2004, which is when the government alleges Sackie’s scheme to defraud had begun. Depending on the full extent of the circumstances a defendant faces, it may be prudent to plea early, much like Sackie, and not put the government to its constitutional burden of proving a case.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
Operation Crystal Ball: Fraud, Fortune Tellers, and Money Laundering
The United States Attorney’s Office of the Southern District of Florida announced that 10 defendants have been charged in an indictment unsealed today. The indictment, the result of “Operation Crystal Ball,” focused on a group of individuals claiming to be fortune tellers, psychic readers and spiritual advisers. In reality, however, these individuals defrauded more than a dozen victims out of more than $40 million.
The 61-count indictment charges the defendants with conspiracy to commit mail and wire fraud, 11 counts of mail fraud, 48 counts of wire fraud, and one count of money laundering. Each count carries a statutory maximum of 20 years in prison, if convicted. In addition, the defendants will have to pay mandatory restitution to the victims of their crimes.
At first blush it would seem that the U.S. Attorney’s Office indicted these fortune tellers and psychics for being, well, fortune tellers and pyschics. Last I checked, our society had yet to make it criminal to market one’s self as “connected” to the spirit world and charge a fee to clients who want “access” to that world. Call it fortune telling, spiritual assistance, or religion, we haven’t yet deemed such practices as fraud. But upon closer inspection something more sinister was afoot than merely promising people their lives would improve by spiritual means.
On multiple occasions the defendants in this case would induce their clients “to give them large sums of money and other valuables. . . ‘temporarily’ . . . so [that] they could cleanse the money of curse[s] or evil spirits, with the promise of returning the money.” The defendants would represent to their clients that this money “was a sacrifice, not a payment.” That because money “was the root of all evil” it needed to be “set aside and prayed upon.” However the defendants never returned any of the money, even when asked by their clients.
So you see, the fraud (or false pretense) is not in the promise of “relieving [clients] of all evil spirits, the end of bad luck, and the end of curses.” The fraud is that these clients were induced to give the defendants money for purposes it wasn’t actually used for (no matter how ridiculous you may think that purpose is), namely that the money would be “set aside and prayed upon” and ultimately returned to the client.
There was no crime until it became apparent that the defendants were not interested in giving the money back to clients when requested. Instead, the “sacrifice, not payment” money was laundered through various bank accounts and businesses to give it the appearance of clean money, earned by the defendants and their co-conspirators. This extra step of laundering the money demonstrates the fraudulent intent of the defendants. According to the indictment the money was then used to buy homes, luxury cars, and motorcycles to the tune of nearly $40,000,000, further demonstrating their true intent to defraud their clients.
Had the defendants not actually spent the money but instead “set aside” the money, even in interest bearing accounts, where it was “prayed upon,” would have called into question whether a cognizable crime had even occurred. Since there is no verifiable means of proving or disproving the spiritual work performed by fortune tellers, and the fact that such spiritual marketing is not yet a criminal endeavor, the defendants might have been able to fight these charges effectively. But instead the defendants devised a scheme for obtaining money by means of false pretenses, representations, or promises, namely that they should be entrusted with large sums of money that would be available and eventually returned to their clients.
The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.
