Rule 1: Wherever there is money, there are people trying to steal it.
Rule 2: Those who ignore Rule No. 1 can pay a fearsome price.
Doubters of those unassailable credos can just ask Dave York, the owner of Illinois Contractor Supply in Champaign.
He said he was “too trusting” and, as a consequence, “learned my lesson” the hard way.
York watched this past week as his former trusted office manager of 17 years, Joan Chenoweth of Tolono, appeared in U.S. District Court in Urbana and was sentenced to 52 months in prison for embezzling more than $600,000 from York’s business.
U.S. Judge Colin Bruce also ordered Chenoweth to serve three years of supervised release after she finishes her prison sentence and pay $599,153 in restitution to York and another $159,384 to the Internal Revenue Service.
But York doesn’t have much faith he’ll ever be made whole and said the loss of such a large amount of money was devastating to his business.
“We’re still recovering and probably always will be. We’ll never see that money,” he said.
York, who is 64, said that in 2018, he was contemplating selling his business and retiring. To find out its worth, he took his financial records to a local business analyst. It didn’t take long for the analyst to identify wrongdoing on Chenoweth’s part and lay out the dire financial problems confronting York.
What happened to York happens with some regularity to business owners who trust single employees to handle their finances. The failure to have a second set of eyes reviewing income and expenditures or regular checks of the books has allowed many a creative thief to run wild with other people’s money.
In this case, according to court filings, Chenoweth “had control of the financial records of ICS, as well as control of and access to ICS’ credit cards and its bank accounts.”
The evidence showed that Chenoweth was an unlikely embezzler. As a regular lottery ticket buyer, she once won $2 million (clearing $1.4 million after taxes) in the state lottery.
Nonetheless, federal prosecutors outlined the three methods by which she converted business revenue to herself.
They said she “wrote unauthorized ‘vendor’ checks to herself or cash from ICS’ Hickory Point Bank account” that added up to $254,000. She either deposited the checks in her personal bank account or cashed them and covered up her actions by coding “the checks as payments to ICS’ vendors in ICS’ accounting software.”
Prosecutors said she also “used ICS funds to make payments” on her credit cards. They added up to $304,861 and went to pay for “numerous extravagant purchases, including thousands of dollars spent on baseball tickets.”
Finally, Chenoweth wrote “unauthorized payroll checks to herself payable from ICS’ bank account” that added up to $59,848.
“She then later voided many of those checks in ICS’ accounting software so they did not show up on her W-2 statement of wages at the end of the year,” according to court filings.
Money generated from criminal behavior is subject to income taxes. So in addition to the thefts from her employer, Chenoweth violated federal tax law by failing “to report the fraud proceeds as income” over a four-year period. The IRS concluded she “failed to pay $159,384” in federal taxes.
After being confronted, Chenoweth admitted her criminal conduct and pleaded guilty. Her lawyer, Chad Beckett of Urbana, said she feels “shock and shame at the extent of her wrongful conduct.”
Beckett said her friends “paint a picture of a woman stunned and heartbroken by the loss of her father in 2008, and a resulting depression that contributed to her making the bad decisions for which she must now answer.”
One friend wrote in a letter to the judge that “the Joanie Chenoweth I know would never intentionally do anything to hurt or bring harm to anyone.”
But York said Chenoweth’s criminal conduct devastated him, his employees and his business. He said he kept the business afloat with bank loans and personal cash, has three fewer employees now and was forced to pay cash up front “for two years” to persuade vendors to provide him with needed supplies.
Despite that, York said he remains grateful to his friends, supporters, customers and employees who helped him keep his business afloat.
“Champaign is great. I have great customers. I’m a lucky guy,” he said.
Jim Dey, a member of The News-Gazette staff, can be reached at firstname.lastname@example.org or 217-393-8251.