Reprinted
from The New York Times
February 7, 2002
By PAM BELLUCK
Two Harvard seniors embezzled about $100,000 from the Hasty Pudding
Theatricals club, the oldest undergraduate theater organization
in the country, to finance ''lavish lifestyles,'' prosecutors here
say.
The students, Suzanne M. Pomey and Randy J. Gomes, former high-ranking
members of the club, used its credit cards to transfer money to
their own bank accounts, prosecutors in Middlesex County said in
a court document. They said the money supported Mr. Gomes's drug
habit and was also spent on stereo and video equipment and on trips
to New York City, Chicago, Palm Springs, Calif., and Cape Cod. Mr.
Gomes and Ms. Pomey, both 21, pleaded not guilty to charges of grand
larceny on Tuesday, but prosecutors said the two had acknowledged
their involvement in embezzling the money.
Ms. Pomey was one of two co-producers of the Hasty Pudding Theatricals
last year and oversaw the finances of the show, prosecutors said.
Mr. Gomes was the assistant director of the club's ''Man of the
Year'' and ''Woman of the Year'' shows, popular events at which
the club honors celebrities.
Prosecutors said Ms. Pomey had admitted in a statement that she
had given the credit card to Mr. Gomes, who used it to get money
to pay off drug dealers. She said she also transferred money to
her account ''one or two times,'' prosecutors said.
Mr. Gomes placed blame for his actions on a drug habit that ''started
freshman year with Ecstasy and escalated to crystal methamphetamine,''
prosecutors said.
Ms. Pomey's lawyer, Michael DeMarco, said in a statement that his
client ''has asserted her innocence of these charges,'' adding that
''many of the allegations in the Commonwealth's statement of the
case are inaccurate.'' Mr. DeMarco's statement said Ms. Pomey had
repaid the Hasty Pudding Theatricals ''as much as $23,000.''
Mr. Gomes's lawyer, Henry A. Cashman, said Mr. Gomes ''hopes to
get this behind him as soon as possible and try to graduate from
Harvard University.''
Hasty Pudding is known for some of its alumni, including the actors
Jack Lemmon and Fred Gwynne. Its awards ceremonies invariably require
the honoree to do something outrageous. Mel Gibson had to recite
a soliloquy from ''Hamlet'' while escaping from a straitjacket.
Tom Cruise had to wear a bra and red stiletto heels. The latest
winners are Sarah Jessica Parker, who is to receive her award on
Thursday, and Bruce Willis, who is to be honored on Feb. 14.
The prosecutors' statement said the embezzlement had been discovered
by Lena Demashkieh, a student who became a co-producer last March
and found that the group's bank account balance was $40,000 to $50,000
lower than its financial records showed.
The statement says Ms. Demashkieh later noticed a $16,000 withdrawal
from the account, even though such a withdrawal required her approval.
At Harvard, Ms. Pomey was president of the Kappa Alpha Theta sorority,
and in December, The Harvard Crimson magazine profiled her as one
of 15 outstanding seniors.
In an article on the embezzlement reports, The Crimson described
Mr. Gomes as a government major from Plymouth, Mass., who worked
at an Abercrombie & Fitch store and was a researcher-writer
for the Let's Go travel books.
Officers of Hasty Pudding Theatricals declined to comment.
Andrea Shen, Harvard spokeswoman, also declined to discuss the case.
She said the students were still enrolled at Harvard, which typically
waits until criminal proceedings are complete before it decides
whether to take disciplinary action. |
Reprinted
from The New York Times
September 3, 2002
By DAVID CAY JOHNSTON
Contrary to his public denials, the chief executive of the scandal-ridden
United Way in the Washington area was aware of improper financial
practices, was involved in them and disregarded those who tried
to stop them, one of the charity's top executives has written in
a memorandum.
Norman O. Taylor, the beleaguered chief executive of the United
Way of the National Capital Area, has repeatedly said he was unaware
that expense accounts had been abused, that donations had been inflated
to make the agency appear more efficient and that only 52 percent
of the gifts from some donors had been passed on to social services
charities. Mr. Taylor has also repeatedly denied knowing about a
$6,000 a month consulting contract for his predecessor, Oral Suer.
The senior executive wrote, however, that Mr. Taylor had arranged
that contract.
The accusations were made by Kenneth Unzicker, the director of corporate
fund-raising campaigns for United Way in the Washington area, in
a four-page memorandum to an ethics committee formed to deal with
the charity's crisis.
Mr. Unzicker, who has worked at the agency for 28 years, wrote of
his ''grievous concerns about existing policies, practices and conditions''
at the charity. ''In the past 19 months,'' he wrote, ''my attempts
to air my concerns have been rebuffed or ignored by Norman Taylor
and others in control of the organization.''
The memorandum was dated Aug. 27. A copy was provided to The New
York Times by a third party after Mr. Unzicker sent it. The ethics
committee, composed of volunteers, will meet today to review the
information from Mr. Unzicker and others.
The committee chairman, Prof. Samuel Dash of Georgetown University
Law School, sought such information in a meeting last month with
United Way staff members at which he promised that they would not
face retaliation. In an interview, Professor Dash, who was counsel
to the Senate Watergate Committee in 1974, restated his determination
to protect whistle-blowers.
Calls to Mr. Taylor's home and cellphone yesterday were answered
by his wife. He did not call back. Mr. Suer did not respond to messages
left on his home telephone.
Mr. Unzicker wrote that he had attended more than a half-dozen meetings
at which Mr. Suer had orchestrated Mr. Taylor's appointment as chief
executive. ''The strong implication'' of these talks, Mr. Unzicker
wrote, ''was that the approval of Mr. Suer's consulting contract
was a condition of Mr. Taylor's selection as C.E.O.''
The memorandum says Mr. Suer ''maintained complete control over
the selection process'' for his successor. ''Mr. Suer never disclosed
to the selection committee the circumstances of Mr. Taylor's departure
from the United Way of Baltimore,'' Mr. Unzicker wrote.
Mr. Taylor was ousted as head of the Baltimore United Way in 1995
for what its board members have called sustained unsatisfactory
performance. He was paid a six-figure settlement -- the amount was
not disclosed -- which was never listed on that charity's Form 990
tax returns, although such disclosure was required by federal law.
''Mr. Taylor flatly denied any knowledge of these contracts'' with
Mr. Suer and a second person, Brian Ferguson, at a United Way board
meeting and at a briefing last month for agencies that depend on
United Way money, Mr. Unzicker wrote. Mr. Ferguson, a videographer,
was the organization's publicist under Mr. Suer. Mr. Unzicker wrote
that after hearing Mr. Taylor's denials, ''I confronted him with
this lie, to which he had no response.''
Mr. Unzicker wrote that in 2000 he grew concerned about expense
account abuses by Mr. Suer and others, whom he did not name. He
delayed raising the issue, he wrote, until Mr. Taylor took office
in February 2001. Mr. Unzicker and his staff felt relieved after
the change in executives, he wrote, saying that they expected changes
by Mr. Taylor.
''My relief was short-lived,'' Mr. Unzicker wrote. ''The first time
I was asked to sign a check written to Mr. Taylor for expense reimbursement
turned out to be the last time I was able to sign a check payable
to him. I questioned Mr. Taylor about his request for reimbursement
of several thousand dollars. I was told that he was paying for Internet
service'' for the United Way office that solicits contributions
from federal workers, known as the Combined Federal Campaign.
Mr. Unzicker wrote that Mr. Taylor said ''he would provide a more
detailed explanation later.''
''I did sign that check,'' Mr. Unzicker added, ''but I was never
again asked to sign another check for Mr. Taylor.''
Mr. Unzicker wrote that he and a member of his staff, Dulcy Hooper,
had warned Mr. Taylor in February 2001 about ''funny money,'' which
was the staff term for inflating donations to make the charity appear
to spend a reduced share of its revenue on overhead. Mr. Taylor
responded by having Ms. Hooper fired and by shutting Mr. Unzicker
out of executive decisions. |
Reprinted
from The New York Times
November 27, 2002
By ANDREW ROSS SORKIN
Like many busy executives, E. Scott Mead, a top banker at
Goldman Sachs, trusted his secretary to help him run his
life. Beyond answering the telephone and setting his
schedule, she helped organize family vacations and managed
his expense account.
Mr. Mead may have trusted her too much. The secretary,
Joyti De-Laurey, is to appear in court today in London,
charged with embezzling more than $5 million from Mr. Mead
in an elaborate fraud in which she is accused of wiring
blocks of his money to bank accounts in Cyprus.
Ms. De-Laurey has not yet entered a plea in her case, and
her lawyer in London declined to comment on it.
Accusations of grand theft, it turns out, are not so
uncommon among the trusted set of career secretaries and
executive assistants who juggle the lives of the powerful
and wealthy from cubicles outside corner offices. The
phenomenon goes uncounted, so it is impossible to assess
trends in secretarial swindles, but court files around the
United States hold dozens of cases, from petty abuse of an
executive's credit cards to complex conspiracies.
Generally, security experts attribute such episodes to a
lack of oversight and an abundance of envy.
"You have high-end lawyers and high-powered bankers working
16 to 18 hour days living on airplanes," said Daniel E.
Karson, executive managing director at Kroll, the big
investigations and security firm. "They leave a lot of
discretion to secretaries," he said, "and there is a
perception that no one is watching."
Then temptation takes hold, said Toby Bishop, president of the
Association of Certified Fraud Examiners. "When you're a staffer
working for someone who travels to the best places, wears expensive
clothes and makes lots of money," he said, "it's hard
not to be envious and think you should share in that person's success."
Earlier this year, Anamarie Giambrone of Flushing, Queens,
34, was sentenced to up to six years in prison for
pillaging $800,000 from her boss, Eli Wachtel, a senior
managing director at Bear, Stearns. He invited her to his
son's bar mitzvah; she took his money to help start a
family pizza parlor in Queens.
Ms. Giambrone's crime did not involve computer hacking or
complicated wire transfers, according to prosecutors. She
used an erasable ink pen when she wrote out personal checks
for Mr. Wachtel to sign. Afterward, she would erase the
payee's name, raise the amount and make the check payable
to cash.
The pizza parlor, Queens Village Pizzeria Restaurant, has
since closed.
Big thefts - like the one that Mr. Mead is dealing with -
are usually discovered quickly, but many of these crimes
involve a gradual siphoning away of an employer's money and
so are easier to overlook.
Last year, Farnaz Faraneh, the longtime secretary of Lynn
R. Coleman, a partner in the Washington office of the
Skadden, Arps, Slate, Meagher & Flom law firm, pleaded
guilty to stealing $1 million from Mr. Coleman a little at
a time.
Starting in 1994, she would simply make out checks to
herself, usually for no more than $5,000 each, and forge
Mr. Coleman's signature. To avoid being caught, she
intercepted Mr. Coleman's monthly checking account
statements from the mail and removed the cashed checks.
Lawyers at Skadden, Arps seem oddly susceptible. In 1998,
another Skadden partner, Neal McCoy, lost nearly half a
million dollars to theft by his secretary, Maria Susana
Cone-Burrell. She was sentenced to 21 months in prison.
Even more extraordinary episodes of thievery often go
unreported - the losses are handled informally, outside of
court - to avoid embarrassment for executives whose
reputations are built on their financial acumen, lawyers
and security experts say.
"Some companies do not want this kind of exposure and may
eat the million or set up a payment schedule to avoid the
headline," Mr. Karson said.
Mr. Coleman of Skadden, slightly embarrassed himself,
admits he was taken. "I was fooled," he said. "The
one
thing I had no doubt about was her loyalty. You put your
trust in these people." Less trust, perhaps, after becoming
a crime victim; Mr. Coleman said that his new secretary did
not have the same kind of access to his checkbook.
Because many assistants are asked to handle the expenses of
busy executives, they do not need black ski masks to steal
from their bosses.
"If you let your secretary reconcile your bank account and
keep your checkbook, they have the opportunity to both
commit the fraud and conceal it," Mr. Bishop said. "It's
like putting a large bowl of candy in your child's
bedroom."
And because secretaries are usually part of an executive's
trusted inner circle, the thefts can go unnoticed for
years.
For example, Jeanne Gaston of Hopewell Township, N.J.,
worked as Vincent Murphy Jr.'s secretary for more than 16
years, following him after he retired from Merrill Lynch,
where he was assistant to the chairman, to an office in
Plainsboro where he privately managed money. From January
1992 to November 1998, she stole $3 million from Mr. Murphy
to buy real estate, cars and furniture, prosecutors
charged. News reports say that Ms. Gaston sobbed at her
sentencing, where she received a term of up to seven years
in prison.
According to a new study by the Association of Certified
Fraud Examiners, the typical organization loses about 6
percent of annual revenue to employee fraud and financial
abuse. In the largest companies, the average loss in a case
of employee theft or fraud costs $97,000, versus $127,500
in small businesses. The average fraud scheme lasted 18
months before it was detected, the study found. Corporate
insurance policies often provide reimbursement to the
victims; if a credit card or checking account is abused,
banks may cover some of the losses, too.
Ms. De-Laurey, 33, is accused of stealing from one of the
private accounts that her boss, Mr. Mead - a prominent
American investment banker who runs Goldman's global
communications, media and entertainment practice from
London - maintains at the firm. Forging transfer
authorizations and faxing them to Goldman's office in New
York, prosecutors contend, she managed to take as much as
$3 million at a time.
As Mr. Mead was preparing to make a donation to Harvard
University in honor of his 25th class reunion, he asked Ms.
De-Laurey for a copy of a recent statement. She did not
produce it, according to people close to the case, and so
Mr. Mead called the firm's New York office himself, not
suspecting anything nefarious.
When an account representative started ticking off wire
transfers to the Bank of Cyprus during the phone call, he
suspected that there was a serious problem, these people
said. She used the money to buy real estate in Britain and
take lavish trips, these people said.
As investigators connected Ms. De-Laurey to the missing
funds, they began to look at the accounts of her previous
boss at Goldman Sachs, a banker named Ron Beller. The case
against her in London charges that she stole nearly $1.8
million from Mr. Beller and his wife, Jennifer Moses, who
also worked at the firm.
A lawyer in London for Ms. De-Laurey, Francis Flanagan,
declined to comment. Mr. Mead, Mr. Beller and Ms. Moses
also declined to comment, as did a spokesman for Goldman
Sachs.
Of course, executives could avoid becoming victims if they
simply handled their private business, well, privately. But
Mr. Karson of Kroll said the duties of an executive
assistant extend well past company needs.
"Shopping for the children's birthday gifts is part of the
job," he said.
Still, lessons are being learned.
After Mr. Mead's problems surfaced, bankers at Goldman
Sachs were sent an advisory instructing them to always have
a second set of bank statements mailed to a home address. |
