June 22, 2015
By Bob Coleman
Editor, Mug Shot Monday
One of the consistent fraud signs is being ripped off by long-term employees — both on the lending side, and the small business side.
The long-term internal CPA, Irene Brooner helped herself to $2 million of company funds over 11 years, and forged loans docs to rip off Missouri Bank & Trust for another $1 million.
She worked for Galvmet, a sheet metal fabrication facility in Kansas City. The company had 26 employees and $14 million in sales at its peak in 2008.
Irene controlled payroll and all the books.
So, takeaway number one is bring up this story to your borrowers and ask them about financial controls. Back in the day, we always sent the business checking account statement to the owner’s home. Today, make sure they get the monthly email of the pdf sent directly to them. And make them read it.
Anyway, Irene spent the embezzled funds on a bunch of cool stuff — including an awesome man cave.
In the basement of her house, she built “The Dirty Duck.”
Amenities included seating for 15, a granite bar top, four or five tap lines, a refrigeration system, three flat-screen televisions, a smoke machine at the entrance, two couches and stained wainscoting around the room approximately eight feet tall. Mannequins, positioned throughout the bar, are outfitted with authentic U.S. and German uniforms and weaponry from the World War II era, including a Thompson sub-machine gun and multiple M-1 Garands with attached bayonets. Brooner told FBI agents that her husband, a carpenter, remodeled the bar in 2003 and 2004.
Irene’s spending included paying off her mortgage for $289,290, buying $81,686 in jewelry, and spending at least $400,392 on clothing and other retail, $97,180 on restaurants, $78,439 on vehicles, $169,389 on furniture and home decor, $62,003 on travel, $38,317 on electronics, $21,346 in ATM withdrawals, $59,571 on spa visits and beauty items, $68,745 on tuition for her children, $18,383 on alcohol, $104,060 to her children, $216,377 in assorted checks under $500, $64,557 in donations, $254,168 in other credit cards, and by purchasing other items.
Brooner purchased a 2004 Lexus R33 sport utility vehicle, on which she made 64 payments totaling $51,813. Brooner also bought 69 pieces of jewelry and accessories from Meierotto’s Midwest Jewelers totaling $29,701 and 82 pieces of jewelry and accessories from Tivol Jewelers totaling $51,984.
More from KCTV 5 of Kansas City:
Her co-workers even say she was the last person they would suspect of anything fishy.
Mike Orndorff loved working for Galvmet, and for the former Marine who owned the sheet metal company.
“He was one of the greatest guys to ever work for,” Orndorff said.
When Galvmet, Inc., shut its doors in May, Orndorff was less upset about losing his job than about the owner losing his business.
“The impact has been devastating,” said Ketcham, who built the sheet metal business from the ground up 22 years ago.
Ketcham said the mass layoff of 20 employees was gut-wrenching.
“We were like a family. I mean, there was a lot of tears shed on both sides … a lot of hugging,” Ketcham said.
At the time, he thought the problem was a long-run of soft sales. No one at the company suspected Brooner, 52, the controller, would be accused of siphoning $2 million from the family business.
“To know the woman, to talk to her and to be around her, you wouldn’t think that this was going on at all. It floored me,” Orndorff said.
The court ordered restitution of $3 million, and forfeiture of the Lexus and jewelry.