1,300 Felony Fraud Charges is a Lot

We head to northern Pennsylvania this week. From North Penn News comes the story of Judith Butt, age 73. Butt is accused of embezzling $375k from the Gwynedd Office Condominium Association (GOCA). From the article:

“GOCA is a group of tenants that occupy suites at 311 Sumneytown Pike, and they hired Butt as their accountant in 2009 to maintain their account and pay bills for sewer, electric, landscaping, cleaning, and other expenses.”

So we have an office building made up of condos. They have an association to manage shared costs. Butt was hired as the bookkeeper. Simple enough.

Butt was paid a little more than $4k a year to manage the account using her own computer and equipment. So about $350/month to write some checks and collect condo dues. Unsurprisingly given what we talk about here, Butt wrote checks for her own use including checks to Diamond Appaloosa Ranch where Butt is a partial owner.

She was caught in March 2023 when the sewer authority came looking for $22k in payments dating back 3 years. GOCA checked the bank account and found all kinds of suspicious payments, so they went to Butt. Many folks roll over immediately when confronted, but not Butt. She doubled down.

Butt denied GOCA access to Quickbooks claiming her computer was working. She wrote them a check for $7k saying it was for mistakenly writing checks from the GOCA account rather than her personal account. Butt had previously changed all billing and account information for the bank and vendors to her house, making it more difficult to research. If that wasn’t enough:

“She later provided 11 sealed envelopes containing check records from the account to GOCA, however police said 10 of the sealed envelopes were faked to appear as if they were sent via USPS, and the checks inside did not match with the account records provided from the bank, according to police.”

That’s dedication. Creating fake checks and bank records after you’ve been caught is a bold move. Unfortunately for Butt it wasn’t bold enough. She was arrested and charged with felony counts of dealing in proceeds of unlawful activities, receiving stolen property, thefts by unlawful taking, theft by deception, access device fraud, theft by failing to make required disbursement of funds, and 1,302 counts of forgery. The thefts are alleged to have occurred between 2016 and 2023 but bank records were only available back to 2016. Butt started work in 2009 so the actual theft could be higher.

Often we see charges of guilty pleas of wire fraud or mail fraud in cases like this. Those frauds are easier to prove. Thirteen hundred counts of forgery mean the prosecution is mad. Even without any kind of segregation of duties here a simple independent bank rec would have caught this much earlier.