Misplaced trust: Millions stolen Bucks, Montco organizations

 

By Matt Coughlin Staff Writer for The Intelligencer | Posted: Tuesday, October 1, 2013 5:55 am

There are reasons to trust them — office workers who’ve been with the company for 30 years, volunteers who were good coaches or umpires, even family members.

But nonprofits, businesses and volunteer groups shouldn’t be handing anyone the power over their finances without a little oversight or digging into their background, experts warn.

Millions of dollars have been stolen from various organizations in Bucks and Montgomery counties in the past year alone. In some cases, the victims might have avoided trouble with a background check and in others, some form of oversight could have helped prevent the thefts, the experts added.

On Thursday, Danette Lewchick was sentenced to three to six years in state prison for stealing $642,000 from the Warrington Community Ambulance Company as its financial secretary. She was the mother-in-law of the company’s chairwoman and, after four months on the job, she took over handling the books and was crafty enough to bypass the oversight systems, according to investigators. But should she ever had gotten the job?

Montgomery County District Attorney Risa Vetri Ferman said any organization can do its own “amateur background investigation.” There are plenty of free resources online, including records from the criminal courts in Pennsylvania, licensing records kept by the Pennsylvania Department of State and Bucks and Montgomery County’s civil court records. Federal court records are available online at $.10 a page and can provide a great deal of insight.

When Lewchick was hired by Warrington Ambulance in 2008, she was just two years removed from a bankruptcy case involving her and her ex-husband.  She owed hundreds of thousands of dollars, including $178,000 to her former father-in-law and $40,000 to Atlantic City casinos.

A check of the federal court system would have revealed the bankruptcy, including the substantial amount of money owed to the casinos. Once she got hold of the ambulance services’ finances, she blew the stolen money, and $500,000 of her own cash, at Parx Casino.

“People take advantage of misplaced trust,” said forensic accountant Dennis Houser, who’s Financial Forensic Consultants firm helped police investigate the Warrington ambulance case. Houser said organizations should do thorough background checks on anyone who could end up in a position handling money. But not just criminal background checks, he said. Credit checks can reveal a lot about a person’s debt and suitability to handle money. 

Robert Butts was an unemployed former accountant who volunteered to coach and umpire games for the Middletown Athletic Association when it was looking for a treasurer. He’d recently served as an adviser to Middletown Township and eventually got a job handling money for Lower Southampton Township.

But in the months after becoming the athletic association treasurer, he stole $24,000 from the nonprofit, spending the money on his mortgage and at a local strip club.

Court records showed that he was experiencing financial trouble at the time and facing foreclosure on his home. A check of records from the Pennsylvania’s Department of State, which warehouses information on professional licenses, showed his accounting license had lapsed years earlier. Butts pleaded guilty in June and was placed on five years probation.

The first line of defense, Houser said, is the hiring process even before background checks are done.

Government agencies, businesses, nonprofits and volunteer groups should all handle it the same. There should be an application that specifically asks if someone has committed a crime. It can serve as a deterrent for bad applicants, or a message to those who do apply. Another step is asking applicants what they would do if they caught another employee or volunteer stealing.  

“The importance may be the question itself,” Houser said.

The answer could reveal whether a business still wants to hire the person, but also sends a “zero tolerance” message.

The Montgomery County District Attorney’s Office and the Controller’s Office teamed to put together a presentation for nonprofit athletic organizations hoping to teach them to protect themselves from being victimized.

The last thing any organization should allow is one person handling the books, writing the checks and signing them, Ferman said.

She added that having checks and balances is important for organizations. Any cash transactions, such as fees collected at sporting events, should be counted by two people. Organizations should also require two signatures from predetermined people on all checks.

Dean Ibrahim, a municipal solicitor, said local governments require two signatures. And, he said, a signer should not be the check writer.

And experts agree that three or more people should be reviewing the records. Ibrahim said looking at the bank records directly won’t stop all kinds of theft, but it will minimize the damage. Officials will catch on to theft quicker, he said.

Houser stressed the importance of reviewing bank records specifically.

In the Lewchick case, the ambulance company’s books were altered so that Lewchick’s ill-gotten money was hidden as legitimate expenses. The same was true of Nancy Cresse, a 30-year employee of Keystone Volvo in Doylestown, who took more than $740,000 from the car dealership during a six-year period toward the end of her employment.

Houser has been involved in financial investigations for nearly 30 years, since first getting involved in a 1985 Lebanon County case in which money was missing from the courthouse. Last year his son, Jeffrey Houser, a lawyer and former federal probation and parole officer, joined his practice and together they’ve been assisting police investigating white collar crime across the state.

The first step in jump starting an investigation, Jeffrey Houser said, is getting the bank records. They then compare the bank records with the company’s accounting records looking for discrepancies.

Of course, the banks aren’t always as forthcoming with records as investigators would like, Dennis Houser said.

In one case a couple was serving as the caretakers for a person who was not competent to take care of finances. The couple wrote checks from the victim’s account, but cashed them at a “walk-in pay” location. “Walk-in pay” shops allow someone to take a check written to them and divert the money from the check writer’s account through the “walk-in pay” company to another party, such as a utility company or other bill collector. These are also known as ACH (Automated Clearing House) transactions. Houser said their investigation hit a wall when they discovered that the “walk-in” pay company had gone out of business. The team of investigators had to get the “walk-in pay” company’s bank records to show the stolen money coming in and where it went.

“More and more the world is going paperless or electronic and while there is some good in that, it can make it more difficult to get copies of canceled checks,” Dennis Houser said. “With electronic banking, it is easier to steal money and disguise the disposition of funds.”

Ferman said there’s always been theft from organizations, but there was a time when organizations wouldn’t pursue criminal charges. Instead, they handled theft internally.

“The importance of reporting crime is self evident, if you don’t hold (criminals) accountable, the likelihood is they will move along and do it to someone else,” Ferman said.

She and Houser both said there have been cases where someone “got away with it,” the first time. But even if they don’t get away with it, other organizations might not catch on.

Ferman’s office is prosecuting the case against James Lee Moody, 47, formerly of Souderton. Moody stole nearly $20,000 from the Special Olympics in 2001 while he was a controller with the organization. And detectives arrested him earlier this month after finding he’d allegedly stole $150,000 from a Lower Providence church while he was their bookkeeper between December 2010 and June 2013.

Investigators said Moody gave the church another person’s Social Security number and other information so they didn’t discover his criminal past. But they could have Googled his name, Ferman said. He was still on probation from the 2001 thefts.

“You can trust, but you have to verify,” Ferman said.

 

 

Cops: Former Warrington ambulance employee stole $642K

  

By Matt Coughlin and Freda Savana Staff Writers for The Intelligencer | Posted: Tuesday, March 12, 2013 6:00 am

A now former Warrington Community Ambulance employee stole more than $642,000 from the nonprofit over four years, often while en route to a casino, according to police.

Danette Lewchick, 56, of Augusta Drive in Jamison, was sent to Bucks County prison Monday afternoon after she was unable to post $25,000 bail on the theft and related charges.

She became the ambulance services’ financial secretary in 2008, three years after filing for bankruptcy to get out from under more than $400,000 in debt, including $40,000 owed to casinos in Atlantic City, according to court records. By April 2008, she had full control of bookkeeping records.

Lewchick was arraigned Monday in Warwick on charges of theft, forgery, computer trespass and dealing in the proceeds of illegal activities. If convicted on all charges, she could face more than 40 years in prison.

District Judge Jean Seaman set April 1 for Lewchick’s preliminary hearing.

Lewchick was accompanied by her husband and declined to comment as she waited to enter the courtroom.

Her attorney, Jeffrey Solar, said his client has “a severe gambling addiction.”

Marc J. Furber, chief of the economic crimes and arson division in the Bucks County District Attorney’s Office, is prosecuting the case. “It’s sad when you have someone do this to a community organization. There’s an added level of trust,” he said.

Lewchick, who previously has used the names Danette Faulstick and Danette Albanese, married the father of current Warrington ambulance board Chairwoman Jennifer Lewchick in 2009. Jennifer Lewchick, who is not believed to have known about the alleged thefts, has declined to comment on the allegations against Danette Lewchick.

Police began their investigation into the ambulance services’ financial records last year. Warrington Ambulance is partially funded through public money, but also takes in donations and insurance payments for the cost of services.

Investigators started by reviewing the ambulance company’s Citizens Bank account. They said they found that during a two-week period in July 2012, Lewchick allegedly took cash, had checks written out to herself and made ATM withdrawals from the account for a total of $82,000, most of which had been transferred into her personal account. Additionally, two board members said their signatures, which were needed for authorization, on the checks had been forged, police said.

Police then checked in to other accounts and said they found checks written to “cash” or to Lewchick between 2008 and 2012 ranging in amounts of between $600 and $25,000. According to court records, cash withdrawals and ATM transactions were made by her on those accounts as well.

Warrington Ambulance contracted with Volunteers Financial Services after the company’s director was convicted of theft in 2005. Brian Kraft was convicted for stealing more than $22,000 from the squad using debit and credit cards. Kraft was given a position with control over money despite prior convictions of theft, including stealing more than $1,000 from a retail store where he worked.

But when Lewchick took over the books, VFS provided only tax preparation and monthly summaries for the board based upon Lewchick’s accounting, according to court records. Investigators compared the actual bank statements with the records kept by Lewchick and found the records were altered to match forged banking records, according to court records. They also discovered that Lewchick was making fraudulent payroll entries that enabled her to receive pay beyond her entitled amount between 2008 and 2012, police said. 

Financial Forensic Consultants assisted police in an analysis of the records created by Lewchick and determined that Lewchick’s total theft from the ambulance service was $642,741.25, according to court records.

To further their investigation, police reviewed video surveillance of some of Lewchick’s ATM transactions. They said many of the withdrawals were made at Parx Casino in Bensalem, or at bank branches in Upper Southampton and Bensalem — between the casino and Lewchick’s home and job. Other transactions were completed in Quakertown, police said. Gift cards to Sands Casino, other items associated with Pennsylvania casinos and a oneway plane ticket to Las Vegas were found in Lewchick’s car, court records show. Detectives further reviewed state Gaming Control Board records and found that Lewchick had been frequenting Parx Casino since August 2010, but had also been gambling at the Sands Casino in Bethlehem.

Before she was hired at the ambulance company, Lewchick had been Danette Albanese and lived in Northampton, police said. She and her husband filed for divorce in 2004 and Danette was granted bankruptcy. Among her debts were $201,000 in mortgages and vehicle loans, more than $178,000 in personal loans and credit card debt, including $71,900.01 owned to her former father-in-law, and nearly $40,000 owed to Harrah’s, Borgata and Trump casinos.

Lewchick’s arrest is part of a string of troubles at the nonprofit, which opened a new facility last year.

The squad’s former chief has sued the nonprofit, claiming he was fired for being a whistleblower on the Lewchick case, and a former board member has sued seeking reinstatement after being ousted when she said she questioned the ambulance company’s finances.

 

 

Former Warrington ambulance official gets prison in theft

 

By Matt Coughlin Staff Writer for The Intelligencer | Posted: Friday, September 27, 2013 5:15 am

A former Warrington Community Ambulance employee is going to prison after stealing more than $640,000 from the nonprofit service to support a gambling habit.

Danette Lewchick pleaded guilty in July to dealing in the proceeds of illegal activity and a series of theft charges after taking $642,741.25 from the ambulance company. She was sentenced Thursday to three to six years in state prison to be followed by 14 years of probation.

At her sentencing hearing, Lewchick admitted to blowing it all — along with a half million dollars of her own money — at casinos, including Parx in Bensalem.

Lewchick was the ambulance services’ financial secretary in 2008 and by April was in control of the finances. A forensic examination of Warrington Ambulance’s records revealed that between January 2008 and July 2012 Lewchick wrote herself checks to be cashed, increased her paycheck and even made direct withdrawals from the ambulances’ bank accounts, including transactions at an ATM inside Parx Casino. And to hide those illegal transactions, she created fake accounting entries, fake records of bills and bank statements that enabled her to bypass existing checks and balances on the nonprofit’s income.

Her sentencing hearing had been deferred until Thursday so officials could create a presentencing report, investigating her background to help recommend an appropriate sentence.

Lewchick said she lost $1.1 million due to a gambling addiction and that she hoped for mercy from the court and forgiveness from the people she cared about. However, her words were meaningless from the judge’s perspective.

“This court is not fooled by statements of regret, statements of remorse,” Common Pleas Judge Clyde W. Waite said before handing down the sentence.

Throughout the presentence report Lewchick is referred to as a “pathological liar,” according to Marc Furber, the district attorney’s chief of economic crimes and arson division.

The report called for four to eight years in state prison, which far exceeds sentencing guidelines of nine to 16 months on the primary charges in most cases, or 25 months in cases with aggravating circumstances. Waite chose to go with the aggravating circumstances sentence, but was pensive about not giving a longer sentence.

Waite also ordered Lewchick to pay $573,000 in restitution to the ambulance service, $100,000 to the ambulance service’s insurance company and the costs of her prosecution, including more than $30,000 in fees for the investigation.

“If a more severe sentence could be given ... but it will have to be within the guidelines,” Waite said.

He criticized a statement by Lewchick that she didn’t think her actions would hurt the people she cared about. She was referring to the ambulance company at the time. 

Waite said he was offended by the statement.

“She will not deceive this court,” he said.