Accountant sentenced to prison for embezzlement
URBANA — Neal Freeman offered no hint why he stole hundreds of thousands of dollars from the company whose owners had employed and trusted him for decades and no explanation to the co-workers who lost their jobs when the company went under.
"Not a day goes by I don't regret what I've done. I was at the company 31 years. Many of those people are my friends. That I've betrayed them in such a manner is something I have to live with the rest of my life," said the 59-year-old former accountant for Champaign Builders Supply Company.
Freeman was sentenced Tuesday by U.S. District Court Judge Michael McCuskey to 37 months in prison and ordered to pay restitution, back taxes, and assessments totaling about $1.05 million.
The company, located for 87 years at 30 E. John St., C, closed recently, unable to recover from the loss of the capital, which was compounded by the economic downturn during the recession. The losses were discovered by Marsha Elliott, the adult daughter of the late owner Don Blager, in January 2011.
Freeman was indicted a year later, in January 2012, on 34 counts of wire fraud and filing a false tax return for stealing about $860,000 from the company between August 2003 and January 2011 and failing to pay income taxes on the supplemental income that supported his lavish lifestyle.
He pleaded guilty in May. At the time of the plea, the company was still open, although struggling to stay afloat.
Freeman, 59, formerly of Mansfield, and now living in an apartment in Mahomet, was ordered to report to prison Jan. 15.
"It is a horrendous crime," Judge Michael McCuskey said, noting that Freeman had committed at least 286 separate felonies, representing the checks he wrote to himself from company accounts over the years.
Champaign police detective Pat Kelly learned that Freeman spent the money on such things as a $16,000 Bobcat, a motor home, a pickup truck, a sport utility vehicle and the transformation of a spare garage into a "man cave" with such amenities as a flat-screen TV, an entertainment center, wet bar, juke box, popcorn machine and pool table. He also traveled to NASCAR racing events.
"Neal, I wonder how many thousands of people would sign up for 37 months of jail for $900,000? I'll bet it would be a long line," the judge said, lamenting the low sentencing range that Congress has ordained for such white collar crimes as Freeman's.
Freeman pleaded guilty to all 34 counts and cooperated with the government in his prosecution, prompting Assistant U.S. Attorney Elly Peirson to recommend the sentence the judge gave, which was a few months shy of the maximum 41 months he could have received given his lack of criminal history.
"The closing of this company as a result of the defendant's greed is significant. He was well compensated but that was not enough for him. He had to supplement his income to the tune of about $200,000 a year," Peirson said.
She also asked that restitution of $860,622 be repaid to Gloria Blager, 87, of Bloomington, the widow of Don Blager. He died in March 2002 after owning Champaign Builders Supply for 29 years and left the business to his wife.
Peirson made no mention of the number of employees now out of work but in an earlier interview with The News-Gazette, Marsha Elliott of Hinsdale, who was on the board of directors, said the business had about 16 full-time employees in early 2012, down from about 24 years earlier.
Urbana attorney Blake Weaver, who was standing in for his partner and Freeman's attorney, Tony Novak, said he was perplexed by their client's motivation.
"The only thing I can grab is there's some treatment for depression in 2003. Whether that's the cause or the reason for his conduct, I can't say," said Weaver, agreeing that the restitution was Freeman's obligation and the prison was his punishment.
Noting that Freeman will be in his early 60s and have a felony conviction on his record when released, Weaver said "it's pretty apparent that full restitution will likely never occur."
So far, the government has obtained about $80,000 from the sale of properties that Freeman had in Mansfield. Peirson said they are still working on the forfeiture of a retirement fund he had.
In a victim impact statement read aloud at the sentencing, Lindsey Elliott, the grandchild of Don and Gloria Blager, wrote that white collar corporate crimes are far from victimless.
"The community lost a strong business, which employed its members for decades at a time, while paying them well and taking care of them like family. Those people are out of jobs now, in one of the worst economies our community has seen. My grandmother watched as the business her husband built with his heart and soul was destroyed. Destroyed because of greed. Where she used to see good in everyone, she can no longer trust. She considered Neal part of her family. Instead, now, she is saddled with undue stress and hurt," Lindsey Elliott wrote.