October 22, 2021
Fraud Friday – Business Owner was Sentenced 2 Years in Prison for Embezzling From Business Partner and Financial Institutions
The owner of a commercial flooring business was sentenced to two years in prison for embezzling more than a million dollars from his business partner and financial institutions. From 2011 to 2016, David Gluth and a co-conspirator took advantage of the company accounts to pay for their own personal expenses like luxury vacations, Nordstrom bills, liquor purchases, and a home mortgage. The U.S. District Judge, Richard Jones, tells David, “You treated the victim like your own personal ATM…Your return on [your friend’s] investment was to orchestrate a significant and devastating fraud.”
Gluth’s friend and co-owner contributed $500,000 to start their company. David and the company bookkeeper, Jodi Hamrick, not only used the company’s accounts and funds, but they also took out loans and obtained lines of credit under the business’s name. The co-owner had no knowledge and did not consent to the loans or credit. There was evidence presented that revealed years of Skype messages between Gluth and Hamrick planning and executing the fraud in detail. To carry out this fraud they forged signatures and documents, altered records, had secret bank accounts and credit cards, and created false bookkeeping entries.
After being left in the dark, the co-owner of the business went to court with the embezzlement. While this litigation was taking place, David schemed to open a new flooring business. He planned on bringing the pending jobs and stream of income to this new business. Jodi and David later attempted to modify a personal loan and place it in the company name after they were barred from having any involvement in the company.
Eventually, the company went bankrupt in 2016, and the business partner was left with debt. The victim “lost his ability to trust other people…that can never be restored…a breach of trust like that can’t be recovered. That’s a permanent loss,” comments Judge Jones.
Along with the prison sentence of two years, David Gluth agreed to pay restitution of $325,000.
DOJ Press Release