Firm not after admitted embezzler - Omaha.com
Published Sunday, April 28, 2013 at 12:30 am / Updated at 7:35 am
Firm not after admitted embezzler
ROLLING UP A BIG DEBT
Caroline K. Richardson admits stealing more than $4 million from an Omaha business between 2010 and 2012. But she gambled a lot of it away; her most prolific year was 2011.

Amount embezzled: $2.8 million

Casino visits: 251

Net gambling losses: $1.8 million

She admitted she stole a staggering $4.1 million from an Omaha business over two years, according to court documents.

Yet Caroline K. Richardson is not charged with theft or any other crime.

The reason: The business she reportedly stole from — Omaha's Colombo Candy & Tobacco — isn't pursuing a prosecution, according to the Douglas County Attorney's Office.

Nor has Colombo filed suit against her. Instead, Colombo and its owner, Monte L. Brown, have made the bold move of filing two lawsuits that blame a casino and a previous employer for the woman's “massive embezzlement.”

On top of that, Brown and his attorneys have chosen not to name the alleged embezzler in the two lawsuits, instead referring to her by the “Jane Doe” moniker typically reserved for sexual assault victims.

However, two people familiar with the theft have identified the “Jane Doe” as Richardson, 54, the former Colombo controller who purportedly admitted to stealing millions from the business.

Richardson declined to address the allegations.

If true, the theft would qualify as one of the most brazen, and lucrative, individual thefts in state history. Former Fremont resident Thomas J. Herink — who, coincidentally, also once worked for Colombo — recently was sentenced to 18 months in federal prison in a separate case in which he stole $6.8 million from banks that were lending money to his golf construction company.

Colombo's strategy of targeting two businesses but not the alleged embezzler raised eyebrows as well as questions last week.

And it raised the concerns of Douglas County Attorney Don Kleine. He said one of his investigators had a brief meeting with Brown and his lawyers months ago — and told Brown that he needed to report the theft to police before prosecutors could proceed.

It doesn't appear that Colombo did so, Kleine said. Both the Omaha Police Department and the Douglas County Sheriff's Office said last week that Colombo had not reported the theft.

Alerted last week to civil court documents that claim “Doe” has admitted to taking millions, Kleine said he is mulling a rare move: pursuing a theft case without the victim's cooperation.

Kleine said businesses sometimes are reluctant to report thefts out of fear of bad publicity — that people will conclude lax oversight led to the embezzlement.

“We take a very aggressive approach with these cases,” Kleine said. “The concern is if we don't do something about it, the (embezzlers) are only going to be emboldened, and they're going to victimize someone else.”

A national expert offered another reason that Brown wasn't targeting, or naming, Richardson.

“She has nothing left,” said University of Nevada Las Vegas professor William Thompson, an expert in lawsuits against casinos. “So she's cooperating with him — and he's using her to go after deeper pockets.”

Brown's attorney, Jill Ackerman, declined to respond to questions about whether Colombo made a deal with Richardson to not seek criminal charges.

“Law enforcement is aware of the situation,” Ackerman said, without offering specifics. “Colombo Distribution is taking every action to assure that financial reparations are made.”

The lawsuits by Colombo and Brown name — and blame — others.

In the first lawsuit, Brown faults Richardson's former employer — Omaha accountant Thomas Brune — for recommending that Colombo hire Richardson as his controller and for not spotting her theft as he reviewed the company's books.

Brown also alleges that Brune knew that Richardson had a history of embezzlement. The lawsuit claims that Richardson also stole $1 million from a prior employer. A person close to Brune said he had no such knowledge.

“Colombo's claims against the defendants are wholly without merit,” attorney Timothy Thalken, who represents Brune, said in a statement. “We fully expect that the facts will establish that the defendants are not at fault and have no responsibility for the dishonest acts of Colombo's employee.”

In a second, even bolder suit, Colombo is suing Ameristar Casino, saying the casino knew or should have known that Richardson was using illicit means to get the millions she gambled away at the casino.

According to the lawsuits and attorneys in the case:

Colombo, also known as MLB (Monte L. Brown) Logistics, is a privately held business — with a warehouse near 104th and I Streets and trucks that distribute candy and tobacco products to stores throughout the Midwest. The company appears to have fewer than 10 upper-level employees.

In July 2010, Brown hired Richardson to become his controller, otherwise known as the chief financial officer.

Brown said he did so on Brune's “strong” recommendation. A person familiar with Colombo's history said Richardson had been brought into Colombo as a consultant to look into suspicions that Herink, the Fremont man, had been stealing from the business. (Herink left Colombo and later went to prison after his golf-course construction company defrauded lenders and insurers out of $6.8 million.)

After her work on that review, Richardson — who went by “Caroline Pugmire” during a previous marriage — was hired to be Colombo's full-time financial controller at an annual salary of about $62,000.

At the time she was hired, Colombo had five employees in its accounting department.

“Jane Doe slowly and systematically started to reduce the accounting department,” Ackerman wrote in the lawsuit against Brune.

Eventually Richardson was essentially the only employee overseeing Brown's books and Colombo's financial activity.

In just two years, the lawsuit says, she took $4.1 million. The theft becomes even more jaw-dropping when examined month by month. Brown alleges the amounts she stole, by month, in 2011: $241,000, $156,000, $217,000, $170,000, $140,000, $280,000, $240,000, $250,000, $400,000, $300,000, $200,000 and $180,000.

In her statement, Ackerman cast the embezzlement scheme as “serious and complex.”

“Jane Doe used a variety of methods to embezzle from the plaintiff, such as inflating inventory, invoices and accounts receivable to commit her wrongful acts,” the lawsuit says. “At times she would (electronically) transfer funds from plaintiff to one of three accounts controlled by her. Later in the scheme she made fraudulent payroll transfers to herself from the plaintiff's corporate bank accounts.”

A person familiar with the theft said it was hardly sophisticated and could have been spotted with a cursory check of Colombo's accounts. Richardson often electronically transferred money from Colombo to her separate business and personal accounts. Other times, the person said, she simply used Colombo's checkbook to write checks to herself.

She “then would engage in classic money laundering by gambling with the stolen funds at casinos,” Colombo's lawsuit says.

In a 23-page lawsuit, Colombo accused the casino and casino workers of luring “Jane Doe” to gamble, conspiring to profit from her rampant gambling and ignoring the obvious disparity between the amounts she was gambling and her income level.

The lawsuit against Ameristar says Colombo has settled with Doe.

“Doe has entered into a settlement agreement that admits to the embezzlement from plaintiff and admits to liability to plaintiff,” the lawsuit reads. “Doe has signed a stipulation for judgment ... granting (Colombo) a judgment against Doe in the amount of $4,099,401.55.

“Doe cannot repay the amount embezzled or stolen from plaintiff,” the lawsuit says.

Court filings provide great detail about the woman's gambling habits — an indication to other attorneys and a national expert that Richardson is cooperating with Colombo in the lawsuit against Ameristar.

In time, the lawsuit says, Jane Doe gambled incessantly at Ameristar, often from 8 p.m. to 4 a.m.

Ameristar employees gave her free food, drinks, hotel rooms. They assigned her an “executive host” to accompany her.

They created a “mazelike” floor plan and an atmosphere with “high ambient noise level ... garish carpet, flashing lights and mirrors.” And they installed video slot machines to “induce protracted high-risk gambling.”

And they lured Doe with the illusion she was winning, the lawsuit says. In those two years, Ameristar issued 4,800 federal forms totaling in excess of $14 million in “winnings.”

However, the lawsuit says, her losses drowned out any winnings.

The lawsuit claims Ameristar “profited $2 million” from Doe's gambling — and that Ameristar employees combined to make as much as $400,000 in tips.

So much so that casino workers would rub the slot machine for good luck, as if they were rubbing a pot of gold.

“They do that,” said Thompson, the UNLV professor. “They egg people on. There's no law against that.”

The lawsuit says Ameristar employees knew what kind of car Richardson drove, what kind of house she lived in and generally what her annual income was. From those factors and others, Ameristar should have known she didn't have the means to gamble millions.

“Ameristar knew the money Doe was using to gamble was embezzled or stolen, or had information that would lead a reasonable person to believe the money ... was embezzled or stolen,” the lawsuit says.

Attorneys for Ameristar could not be reached.

Lawsuits blaming a casino for a gambler's compulsion are rare locally but not all that novel nationally.

Several lawsuits have been filed accusing the casinos of preying on people. One high roller, Omaha businessman Terry Watanabe, sued a Las Vegas casino after the casino came after him for millions of dollars in debt.

At times, Thompson said, casinos will enter into arbitration or settle cases to make sure they don't lose — as in the Watanabe case.

But Thompson said he's not aware of the casinos ever getting socked with a jury verdict.

This lawsuit does provide a “new wrinkle,” Thompson said, in that it's a third party, a business owner, blaming the casinos for an employee theft.

“The business owner usually would go after the embezzler, not the casino,” Thompson said. “It's a long shot. A (jury) is going to ask 'Why wasn't the boss aware of what was going on?'”

Brown's attorney, Ackerman, declined to address that question, except to say: “He took steps as soon as he could.”

That is sure to be a point of contention.

The lawsuits show that Richardson's scheme started to unravel after Nebraska state officials randomly selected Colombo for a routine tax audit. In turn, Colombo's bank demanded a review. The Omaha accounting firm of Darst, Brune & Associates was brought in.

Brown claims that Brune deliberately delayed the review and adjusted accounting entries to “cover up Jane Doe's actions.” Brune adamantly denies those allegations, said Thalken, his attorney.

Thalken has counterpunched with a bold court move of his own: He has subpoenaed Brown's attorney-client records — usually off limits — in an attempt to learn if Brown could have put a stop to the embezzlement sooner.

Meanwhile, Richardson refused to answer a reporter's questions.

Reached by phone last week, Richardson told The World-Herald: “There is no story.”

She paused.

“If there's a story,” she said faintly, “I'll never work again.”

World-Herald researcher Jeanne Hauser contributed to this report.

Contact the writer: 402-444-1275, todd.cooper@owh.com

2011: A big year

MonthEmbezzledCasino visitsNet loss
January$24100022$54000
February$15600018$32000
March$21700025$108000
April$17000017$226000
May$14000018$140000
June$28000024$226000
July$24000024$173000
August$25000027$89000
September$40000019$280000
October$30000016$168000
November$20000029$107000
December$18000012$156000
Totals$2774000251$1759000

Contact the writer: Todd Cooper

todd.cooper@owh.com    |   402-444-1275

Todd covers courts and legal issues for The World-Herald.

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