Study finds state has high rate of embezzling
The cases of a former Dime Bank executive and a longtime employee of the Mark Twain House & Museum, both of whom were convicted last year of embezzling more than $1 million from their workplaces, are indicative of a sad fact: Connecticut is one of the leading states for white-collar crime.
According to a report released this week by Marquet International, Connecticut ranks behind only Vermont in the prevalence of embezzlement schemes. The 2011 Marquet Report on Embezzlement said Connecticut's high ranking is based on comparing embezzlement losses to the state's economic output.
"2011 was another banner year for employee theft in the United States," according to the report.
While embezzlement cases declined by 2 percent from the year before, they are still near historic highs, the report said. The report analyzed nearly 500 major embezzlement cases that were newly active last year and generally involved amounts $100,000 and above.
Two of the more spectacular embezzlement trials in Connecticut last year involved former Dime Bank executive Philip J. Mongillo of Westbrook, who was sentenced in U.S. District Court to spend 51 months in federal prison for his Norwich-based fraud scheme, and Donna Gregor of East Hartford, who pleaded guilty in Bridgeport to wire fraud and filing a false tax return related to the disappearance of funds from Hartford's financially strapped Mark Twain House. She was sentenced to three and a half years in prison.
But the Connecticut schemes pale in comparison to last year's largest U.S. emblezzlement trial, involving a 71-year-old Oklahoma man charged with theft from up to 13,000 trust accounts. Clayton Smart was sentenced last year to 20 years in prison and ordered to pay more than $48 million in restitution.
Other major schemes included $22 million taken from Citigroup, $14.2 million from Wachovia Bank, $6.2 million from Webster Bank and Bank of America and $5.6 million from La Salle University.
"In poor economic times, these kinds of frauds surface more frequently since business takeholders tend to be more attentive to finances," the report stated. "During the boom years, embezzlement often goes unnoticed since the victim organization is typically making healthy profits."
-- Nearly 90 percent of embezzlers acted alone.
-- Most fraudsters -- 72.3 percent -- held positions involving finance, bookkeeping or accounting.
-- About 64 percent of embezzlers were women, but men took about 25 percent more money.
-- Nearly 22 percent of cases involved people with gambling problems.
-- In only 5 percent of cases did perpetrators have a criminal record.
-- The financial service industry was hardest hit by major embezzlements.
-- Non-profits and religious organizations took up the second-biggest chunk of frauds, accounting for nearly one-sixth of embezzlements.
-- The average scheme took five years to be uncovered.
-- The average age embezzlers start to siphon money was about 43.
-- The average loss nationwide was $750,000, but $925,000 in Connecticut.
-- Connecticut had 18 embezzlement cases involving more than $100,00 last year, for total losses of $16.7 million.
-- The average embezzler stole more than $15,000 a month from an employer.
-- The average sentence in major embezzlement cases was just over four years.
-- The most common scheme involved forged or unauthorized company checks.
-- Most embezzlers said they were motivated by greed rather than being faced by financial problems.
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