Ann Arbor Amateur Hockey Association sues former bookkeeper convicted of embezzling nearly $1M

Kimberly Knight is shown in this file photo.

Knight, 45, stole $934,000 while acting as the organization’s treasurer and sole bookkeeper from 2005 to 2007. A lengthy police investigation showed she spent large sums on personal luxuries such as expensive jewelry, vehicles, and tropical vacations. 

She pleaded guilty to felony embezzlement charges last June and received a delayed sentence as long as she began paying the money back.

Detectives previously said they thoroughly investigated other individuals for potential involvement, including Jon Knight, but no evidence was found.

Mike LeGris, Knight’s attorney, successfully argued in the criminal proceedings that more than $200,000 was repaid to the organization after bank officials discovered the embezzlement in 2007. He said the majority of that money came from Marshke.

Organization officials always questioned that argument and say in the lawsuit AAAHA has only received one $75,000 lump sum and several monthly payments of $1,500 since September. Circuit Judge Melinda Morris required both the lump sum and monthly payments for Knight to stay out of jail. Morris will review Knight’s case this fall before rendering a final sentence.

Knight appeared briefly in court last week to answer Morris’ questions about a possible violation of her court order. LeGris said she didn’t turn in tax documents for the businesses, as the judge requested, because they weren’t prepared yet for tax season.

Morris set a hearing for April 30 and ordered Knight to submit the tax records at least seven day earlier.

LeGris said she’ll comply with the judge’s order and is concerned about the civil suit.

The lawsuit requests full repayment of the embezzled funds, plus three times that amount, to be determined at trial. The organization also seeks punitive damages, interest payments and attorney fees.

“We’re committed to tracing and the recovery of every cent of the stolen money,” said Thomas O’Brien, one of AAAHA’s attorneys. He declined further comment Wednesday.

In the 25-page filing, AAAHA alleges Jon Knight knew his wife systematically embezzled funds and deposited small amounts into accounts used by their shared business, Diversified Services of Washtenaw. That money was then used for the company’s operating costs and to purchase its construction equipment.

The suit also alleged Jon used some of the money to purchase Grant’s Towing in Ann Arbor not long before the police investigation began.

The suit accuses Marshke of covering various AAAHA bills with money from his personal accounts on occasions when the organization couldn’t pay because of Knight’s embezzlement. The lawsuit doesn’t detail when or how frequently those payments occurred, but attorneys said they could only determine the extent of Marshke’s alleged involvement through further investigation.

“It’s absurd,” LeGris said. “I don’t understand how they can say that because it was all investigated. If there was a way to bring others into the case than I think it would have happened.”

Grant’s Towing was purchased with lines of credit nearly two years after Knight left AAAHA, he said.

The hockey league still operates out of the Ann Arbor Ice Cube in Pittsfield Township, but the lawsuit notes the money Knight stole was to be used for construction of its own ice rink. The executive board is under new leadership, which implemented tougher safeguards on finances.

LeGris said Knight’s focus is on moving forward with her life but that’s being stymied by the legal activity and media scrutiny. Her case was recently highlight on ESPN’s “Outside the Lines” investigative reporting series.

LeGris said Marshke and Jon Knight will likely have their own attorneys.

Circuit Judge Timothy Connors has yet to set a hearing.

Art Aisner is a freelance writer for AnnArbor.com. Reach the news desk at news@annarbor.com or 734-623-2530.