Lenient penalties for embezzlement pose no deterrent
It’s galling, but not the least surprising, that someone can steal a large amount of money from a nonprofit organization serving children and walk away without spending a day in jail.
It happens all the time.
Sentencing guidelines in Michigan are weighted to punish violent crime and crimes against people more harshly than an offense like embezzlement, which is considered a crime against property.
The result is that it’s quite rare for an embezzler to get jail time - even in a case like that of Kimberly Knight, the former bookkeeper who skimmed nearly $1 million from the coffers of the Ann Arbor Amateur Hockey Association between 2005 and 2007.
Last week, Washtenaw County Circuit Judge Melinda Morris delayed sentencing for Knight under an agreement that will require Knight to pay about $700,000 in restitution, at a minimum of $1,500 a month.
Understandably, some supporters of the youth hockey association are outraged that the deal would allow Knight to avoid serving jail time, while giving her years to repay the money.
But given the leniency with which the criminal justice system treats embezzlers, that outcome was likely.
In an interview earlier this year, Washtenaw County Prosecutor Brian Mackie said in his 29 years on the job, he’s only seen two cases where an embezzler got a jail term at sentencing - and in both cases, the individual had a previous conviction.
Embezzlement from community and nonprofit groups is distressingly common. In addition to Knight, we’ve seen recent cases of a local fire department lieutenant who embezzled $150,000 or more from his Moose lodge and a woman who took $300,000 from a cemetery association. The Ann Arbor Community Center also was a victim of embezzlement two years ago.
Although the number of embezzlement cases does not appear to be increasing nationally, the average amount taken by embezzlers seems to be on the rise.
Given the leniency with which the system treats offenders, organizations have to understand how vulnerable they are. The best defense against embezzlement is financial checks and balances that prevent theft from occurring or catch it early.
That is not, however, to put the blame on any group for being ripped off by someone in a position of trust.
Ultimately, embezzlement is a crime of opportunity, and it’s not likely to become less common unless the law is changed to treat it more seriously. If you can steal a million dollars and all you have to do is pay it back if you get caught, that’s not sufficient deterrent.
In a recent case involving the Montrose school district near Flint, a former payroll supervisor who embezzled some $1.2 million over a decade was given a year in jail, as well as being order to repay restitution. The fact that her punishment included jail time gave that community a greater sense that justice had been served.
Last week, the Michigan House worked on a package of bills that would impose tougher penalties for people who defraud or embezzle money from the elderly.
We don’t find the idea of stealing money from children to be any less repugnant.
This editorial was published in today's newspaper and reflects the view of the AnnArbor.com editorial board.
Comments
MJSteklac
Sun, Sep 6, 2009 : 1:08 p.m.
Expecting restitution is a long shot. The likelihood of the offender getting a job after conviction that will allow the payment of restitution is remote (former Mayor Kilpatrick excepted). I agree with hmm that jail is usually not a deterrent and will place a burden on an already overcrowded corrections system. The embezzler's assets (home, property, vehicles, boats, etc.) need to be seized and liquidated to pay as much of the restitution as possible. Then what ever amount is left over, should be subject to a payment plan.
InsaneGeek
Tue, Sep 1, 2009 : 11:28 p.m.
Let's do some math here... If she were to put the $700k into the bank with a bond and get 3% interest rate on it. This is what she'd get back $700,000 *.03 = $21,000 / year in interest $21,000 / 12 months = $1,750 /month in interest She has to pay $1500/month, while she could be getting $1750/month in interest on simply sitting on the money she embezzled. And after it's paid off she would get to keep the $700,000 *LEGALLY*. I didn't include taxes on the interest, but if you include it at 30%, your monthly income would be $1225, so she'd have to pay $225 out of pocket per month again she gets to keep $700,000 free and clear at the end. If it was closer to the $1mill that she embezzled, her interest income only increases relative to the $1500/month fee. This is *not* a deterrent, heck it's pretty much opposite. I can still the money, put it into a bank and have it's interest pay it off. I don't have to lift a single finger.
Laura Bien
Tue, Sep 1, 2009 : 2:07 p.m.
This is a good explanation of the legislative background concerning this type of crime, and helped me get a better perspective on the story--thank you.
uawisok
Tue, Sep 1, 2009 : 10:39 a.m.
No matter whether you steal...err excuse me embezzle $1 or $1 billion there consequences are off their radar screen until they get caught. Why don't they also put Madoff in with murders and rapists? Because those who make the laws are also the ones who sometime break the laws and they want cushy country club enviroment to serve their time. The race to the bottom continues!
Top Cat
Mon, Aug 31, 2009 : 12:23 p.m.
AccruedInterest is absolutely right. So many Non Profits are sloppy with handling their Finances. At minimum, all checks should have two signatures and the someone other than the primary check writer should be receiving the bank statements.
AccruedInterest
Mon, Aug 31, 2009 : 9:15 a.m.
"The best defense against embezzlement is financial checks and balances that prevent theft from occurring or catch it early." That's Auditing 101, and it's common sense. I would fire the Controller/CFO. If the non-profit hired an auditor, AA.com should publish the name so other non-profits won't be victimized. If one is on a non-profit's board or just a concered member, one should suggest a review of the org's internal controls..
Basic Bob
Mon, Aug 31, 2009 : 8:49 a.m.
A felony conviction on her record is enough of a penalty. No one will ever trust her with their money. If the state puts her in prison, then taxpayers pay for her living expenses and the hockey association gets nothing.
a2grateful
Sun, Aug 30, 2009 : 12:27 p.m.
"I don't think that harsh penalties are much of a deterrent, either."... How do you know?... I support tougher penalties for fraud and embezzlement, including jail, asset seizure of all owned property, and restitution. Put some sharp teeth on the penalties, and then decide effectiveness.... Why would someone oppose this?... Maybe those that oppose harsher penalties are crooks themselves.... How much are you willing to lose?... How much are you willing to take?
shepard145
Sun, Aug 30, 2009 : 12:03 p.m.
I agree with the first post. The real world does not often correlate to your favorite television show where all the henchmen go to jail at the end. With the state budget disaster, its very likely fewer criminals then ever will see prison so much for poetic justice. For the average corrupt suburbanite though, getting arrested, hiring a lawyer, seeing your name in the paper as you are run through the criminal justice system cannot be fun. Most white collar criminals have a bit of psychopath in them and truly think they are smarter then everyone else so getting caught never occurs to them. Agreeing with above again, in that context the idea of deterrent is not remotely on their minds, which is another reason why judges need flexibility when sentencing. While the authors hero, TJ Hooker, might not approve, it looks to me like the judge is living in the real world and hopefully the editor who wrote this piece is not in the bag for another judge next November.
Matt Van Auker
Sun, Aug 30, 2009 : 12:03 p.m.
Oh, yeah, I'm bustin' my butt out here, just to get a pack of smokes, and this loser...How much money do you really need to live!? What a ridiculous situation. I like Hockey. Eastern's Hockey team plays at the Ice Cube. No jail time? Wow, I hope I don't get a parking ticket. Oh, that's right. I take the bus. I hope to see her on there. I hope Brian Mackie does everything he can to prosecute her, to the limit of the law.
GENO
Sun, Aug 30, 2009 : 9:26 a.m.
There is a saying in India: kill one person and you are a murder; kill 1000 and you are a hero.
hmm
Sun, Aug 30, 2009 : 8:46 a.m.
I dont think that harsh penalties are much of a deterrant either. Im sure she wasnt thinking about penalties when she was stealing. I am not saying that I agree with sentencing guidelines, but I dont want to pay to house and feed this woman either. At least she is required to pay restitution. I doubt she will re-offend. I also doubt anyone will hire her, which is another issue all together.