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Former employee of Skinner's indicted, charged with alleged theft of $724K
|Written by CATHERINE SAUNDERS-WATSON, Auction Central News International|
|Tuesday, 23 December 2008 11:44|
WORCESTER, Mass. - (ACNI) A former accounts receivable clerk at Skinner Inc.'s Bolton, Mass., auction gallery was indicted on Dec. 17 in Worcester and charged with the theft of more than $724,000 in cash and goods. Joanne Shea, 72, of Hudson, Mass., faces charges of larceny over $250 and making false entries in corporate books, according to the Office of State Attorney General Martha Coakley.
A well-respected company whose blue-chip sales have achieved several world auction records, Skinner Inc. first contacted Coakley's office in October 2006, telling them they suspected Shea had been stealing money and merchandise from them over a 13-year period beginning in 1993. A Skinner representative told the State Attorney General's office that they believed Shea had used a "lapping" scheme that utilized incoming cash payments to cover funds she had previously taken out. An investigation was launched, and details soon began to surface regarding how Shea had engineered the alleged crimes.
Coakley's office said that, in some instances, Shea received cash payments from customers for auction items, but rather than depositing the cash payments into the company's accounts, she allegedly would keep the cash for herself. Investigators discovered that, in order to cover the stolen cash deposits, Shea would apply incoming check payments of equivalent amounts to the company's books. Upon receipt of these check payments, Shea allegedly deposited the payments into the company's account, but would apply it to the "open," or unpaid, cash payment she had stolen previously.
Shea would then use subsequent check payments to cover the previously deposited but "open" check payments, creating an ongoing, perpetual cycle. Even when misallocating payments, Shea would provide accurate information to the company's inventory system to ensure that paid customers received their items upon payment even when Shea left their invoices in an "open" status.
In addition to theft of cash payments, authorities allege that Shea acquired items from Skinner sales without paying for them. Investigators say that Shea had her own employee account with the company and could use this account to bid on, and purchase, auction items. Shea allegedly did not pay for many of these items, but rather used the money from legitimate payments made by customers to cover the outstanding, unpaid balances on her personal client account. Shea then "lapped" subsequent incoming checks to cover these misapplied payments.
Investigators learned that, in addition to misusing her own account, Shea controlled multiple accounts in the names of relatives, which she used to acquire auction goods without payment. Among the items Shea acquired through her scheme were paintings, antique vases and Art Deco jewelry. Authorities believe Shea used the cash funds she stole for her own personal use.
Skinner Inc. provided Auction Central News with a statement following the Worcester County Grand Jury's Dec. 17 indictment of Joanne Shea:
"In October 2006, executives at Skinner discovered a theft against the company by an employee who worked in the accounting department. The individual's employment at Skinner was terminated immediately. The company detected the theft as part of its own internal investigation into irregularities involving and limited to this individual.'
"The theft did not involve any client or employee accounts or property and was limited solely to a theft against Skinner. Working with outside legal counsel and Skinner's insurance company, we immediately reported the matter to the Massachusetts Attorney General's (AG) office in Boston. We continue to assist them in taking whatever steps are necessary to determine what appropriate actions should be taken to bring this matter to justice.'
"Our goal is always to protect our company, the people we employ, and the privacy of our clients. We take this responsibility very seriously and will do all in our power to protect it. We thank the Attorney General's Office for their ongoing efforts regarding this matter and their help in bringing it to closure."
Shea is scheduled to be arraigned in Worcester Superior Court on Jan. 7, 2009. The case is being prosecuted by Assistant Attorney General Michael Pine, of Attorney General Martha Coakley's Corruption and Fraud Division, with assistance from Financial Investigator Davin Lee of the Attorney General's Office.
A former Skinner department head who asked not to be named told Auction Central News that those who knew Shea were "shocked" to learn of her arrest. "I would describe her as gruff, but kind," the source said. "It's crazy how desperate people are sometimes."
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|Last Updated on Friday, 07 August 2009 14:19|