December 7, 2018
By Dominic J Bartolone
Contributing Editor,Fraud Friday
Fraud Friday — Trusted CPA Firm Employee Embezzles from Small Biz Clients
Another story of small business owners entrusting their finances to a third party and get ripped off.
A Montana woman from West Yellowstone has pleaded guilty to wire fraud charges last week as her eight-year embezzlement scheme finally came to an end.
Ann Bennet Hermanson, 54, appeared in federal court and admitted to U.S. Magistrate Judge Jeremiah C. Lynch that she embezzled over $600,000 from her former employer’s clients.
Hermanson faces up to 20 years in prison and three years supervised probation, as well as agreeing to pay nearly $502,000 in restitution and a $250,000 fine.
For more than 15 years, Hermanson worked as a para-professional in the West Yellowstone accounting firm office of Rudd and Company. As part of her job, she had access to signature stamps and the bank account information of the company’s customers.
Things started to unravel in 2016 when one of the firm’s customers who employed Rudd to pay bills and assist with payroll, Old Town Café, noticed irregularities in their business account and reported it to the accounting firm. After a review of Old Town’s account, the firm found a pattern of suspicious financial activity that also affected other client accounts.
The investigation led to the discovery that beginning in 2009, Hermanson wrote checks from client bank accounts to pay personal bills. They found that she used the money to pay off credit card accounts and internet and phone bills for a residence that she owned with her husband.
Rudd discovered that 160 unauthorized checks or electronic fund transfers were issued from Old Town’s bank account between September 2008 and April 2016, totaling over $116,000. They also found that Hermanson had been embezzling from other accounts and that during the same period, she stole more than $630,000 from six different accounts belonging to the company’s customers.
The owner of Old Town Café told investigators that she was the sole signer on the business bank accounts, but because she had access to the signature stamps and company checks, Hermanson was able to write checks to herself and her creditors, open unauthorized credit cards, and electronically transfer funds into her account.
According to court documents, when approached by a company employee about the account irregularities, Hermanson admitted to taking the money. In April 2017, Hermanson admitted to FBI investigators that she had made unauthorized transactions for multiple company accounts.
Hermanson has been released pending sentencing, which has been scheduled for April 12.