As a home builder for more than 30 years, Marsha Elliot is painfully aware of how the recession has hurt her industry.
But when reviewing financial statements for her late father's building supply company in Champaign about a year ago, she thought the cash losses were "just not right."
Following up on her hunch and using her own business acumen, Elliot got into the bookkeeper's computer and files at Champaign Builders Supply, 30 E. John St. C, the last week of January 2011.
"I started at 3 p.m. on that last Thursday of the month and I never left for 36 hours," she said.
What she found in the first 24 hours was enough to prompt her to pick up the phone and call an attorney friend, who advised her to call Champaign police.
The call resulted in the indictment last month of a long-time, trusted employee, Neal S. Freeman, 57, of Mansfield, for wire fraud and filing a false tax return.
"My dad hired him right out of college in 1979," said Elliot, who lives in Hinsdale.
The late Don Blager owned Champaign Builders Supply for 29 years before his death in March 2002. His widow, Gloria Blager, 87, of Bloomington, is now the sole owner.
Elliot and police later learned that within about a year of her father's death, Freeman allegedly began stealing from the business, supplementing his income to the tune of an extra $100,000 a year on top of his annual salary of $55,000.
"It was pretty straightforward how he was doing it. He was just literally writing checks to himself," said Pat Kelly, a Champaign police detective who has carved a niche as the paper trail investigator.
"He was living a high lifestyle for himself. He was a regular NASCAR traveler. He bought a motor home with money from the business so he could drive himself to these events," Kelly said.
"He built a spare garage next to his home that was completely a man cave: a big flat screen TV mounted on the wall, an entertainment center, a wet bar, a jukebox, a popcorn machine, a pool table," said Kelly.
One of the few times that Freeman deviated from his routine involved the purchase of a piece of equipment.
"He went to Bobcat of Champaign and wrote them a business check for $16,000 for a Bobcat that he had delivered to his house," Kelly said.
The indictment returned against Freeman last month seeks the forfeiture of that Bobcat, along with two trucks, a motor home, the proceeds of the sale of his home, contents of an investment account, contents of a bank account and another $800,000 representing the cash he allegedly stole.
Kelly said it didn't take him long to figure out that Freeman was engaging in activity that would interest the Internal Revenue Service: failing to pay income tax on the money he was taking from the company. Kelly told federal authorities what he had discovered and the "IRS jumped on board pretty quickly."
"Any time you start something this large of a scale with all this paper, you're looking at a year before it gets to court," he said, adding that some of Freeman's suspected dishonest transactions exceeded the statute of limitations.
Kelly said the thefts put the decades-old business in the red for a couple of years, something Elliot said had never happened in its history.
Elliot said the company was started in 1926 by Paul Kent, who approached her father, a civil engineer in Bloomington, about buying the business. Don Blager started buying the business in 1973. It's been at its location on East John Street, just east of the railroad tracks that parallel Neil Street, since its inception.
"My dad painted the trucks yellow and blue in honor of my mom, who is Swedish," she said.
She said her late father "absolutely" liked and trusted Freeman and that she was "floored" when she figured out what he was doing.
"We had routine reviews by an outside accounting firm but they didn't look at the bank statements," she said.
She said the last year has been emotionally and financially devastating for her mother, who has had to take on quite a bit of debt as a result of the theft.
"This is a small company and when you're stealing $150,000 a year... We've had huge expenses to get the equipment back up," said Elliot, adding there will be a civil suit against Freeman.
Elliot said the company now has about 15 to 16 full-time employees, down from about two dozen several years ago.
She said 2011 ended up being a fairly good year for the company.
"We're holding our own. It's taken a lot of work."
Kelly said Freeman left the company pretty quickly after Elliot began asking him for documents a year ago.
"She came down one day and went through years worth of stuff and said, 'I need to talk to you,'" Kelly recounted. "He literally ran out the back door and jumped in his truck. She could hear the tires screeching and he never came back. He knew the gig was up."