B.C. bookkeeper gets 6 years in prison for defrauding over $1M from employer

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The former bookkeeper for a Kelowna, B.C.-based company has been handed a six-year prison sentence for defrauding more than $1 million from her employer.

Sixty-two-year-old Carey Suzanne Earl’s sentence was passed down in the Kelowna Law Courts on May 15, and the decision was posted online Tuesday.

A jury convicted Earl of fraud over $5,000 on Oct. 25, 2023, a crime that carries a maximum sentence of 14 years. The Crown argued for six to eight years’ imprisonment, while the defence sought a two-year conditional sentence order, also known as house arrest.

The court heard that Earl stole approximately $1.3 million from Access Human Resources—an agency that supports people with disabilities—between 2011 and 2018.

When issuing his decision, Supreme Court Justice Gary P. Weatherill noted that some may think six years in prison to be too harsh a penalty, but said to Earl, “Anything less would fail to adequately punish and denounce you for the magnitude of your wrongdoing… or recognize the high degree of your moral responsibility for wilfully, deliberately, and repetitively stealing significant amounts of money from your employer who trusted you, for your own selfish use.”

He described Earl’s crime as “lengthy, sophisticated” and “appalling.”

The court heard that Earl used the money she stole from her employer to pay off credit card debt and go on “lavish vacations,” including trips to Mexico and Las Vegas and cruises.

Crown versus defence

During the trial, Earl’s lawyer posited that her fraudulent transactions were actually authorized by AHR’s principal Clifford Andrusko as part of a scheme to devalue the company due to a fight he was having with an ex-partner.

The defence argued Andrusko sought to make AHR show no profit between 2011 and 2018 so his ex wouldn’t be able to claim an interest in any value increases, and enlisted Earl to secretly siphon money out of AHR to achieve his goal.

Andrusko testified and was cross-examined at the trial, and maintained Earl had exclusive responsibility for the company’s payroll and accounting system and that the payments she made to herself were unauthorized and made without his knowledge or consent.

He testified he started noticing red flags in the company’s financials in early 2018, and his suspicions were confirmed in September of that year. Andrusko said he confronted Earl about the missing funds in October and she admitted to stealing money from the company and “told Mr. Andrusko that she did not know how she could have done such a thing.”

Andrusko “vehemently denied” the defence’s theory during cross-examination.

For her part, Earl did not testify at the trial and no evidence was provided on her behalf.

The judge stated that by convicting Earl, the jury accepted the Crown’s theory and rejected that of the defence.

Wetherill was also not convinced by the defence’s narrative, stating, “I reject the entirety of Ms. Earl’s submissions respecting the defence theory and quantum. They are based on a theory of the case and facts that are entirely inconsistent with the evidence at trial. Mr. Andrusko’s uncontradicted evidence was that, save for some very minor transactions that he could not be sure about, the (payments) were unauthorized and fraudulent.”

The payments

Prior to the final sentencing hearing, there was a debate about the exact amount of money Earl took from AHR, Weatherill said.

The Crown alleged that Earl stole $1,350,234, achieving that by making unauthorized payments to her personal credit cards; adding her son to AHR’s payroll—despite him not working there—and depositing his pay into her own bank accounts; paying herself unauthorized payments; and making unauthorized payments to her husband.

Earl’s defence argued that while she admitted to fraud over $5,000, she disputed the total was that high and said there were “significant holes in the Crown’s evidence” to arrive at that number.

The judge said he was not satisfied the full $1,350,234 in funds were fraudulent, as Andrusko couldn’t say “some minor transactions” were illegitimate. However, he was “easily satisfied” that the Crown proved the amount Earl stole was “well in excess” of $1 million.

“During the trial and other than some very minor transactions, the defence did not attack the quantum of the fraud, but rather proceeded on the basis of the Defence Theory,” he said.

Weatherill thus sentenced Earl on the basis she defrauded more than $1 million.

The sentencing

In a pre-sentencing report, Earl said she stole from her employer due to financial pressures at home. The report also noted that she did not have mental health, substance abuse or gambling issues at the time of her crimes that would explain the fraud.

It also notes that since her arrest, Earl has suffered from poor physical and mental health, including cancer, diabetes and depression that have caused her to be bedridden for extended periods of time and require constant monitoring.

Aggravating circumstances considered in her sentence included the magnitude and duration of her fraud; that Earl hid and destroyed records related to her theft; that she abused her trusted position as a bookkeeper; and that the fraud significantly impacted AHR and its employees both financially and emotionally.

As for mitigating factors, the judge said Earl “was deeply sorry and ashamed for her actions and was willing to accept whatever sentence she receives for her wrongdoing.” He also noted her poor health and lack of a criminal record.

However, Weatherill noted that “On the one hand, it is common for first time fraud offenders to lack a criminal record and be otherwise of good character, but on the other hand, typically it is these features that allow the offender to perpetrate the fraud. This mitigating factor, therefore, is of limited weight.”

The judge ultimately sided with the Crown, agreeing that Earl should serve time in prison, noting that the sentencing principle for large-scale fraud is to discourage others from doing the same.

“Ms. Earl, as you must realize, you have committed an appalling crime of stealing money from your employer who trusted you. You have breached that trust. You have caused not only serious financial damage, but you have caused AHR’s reputation in the community to be tarnished. You have caused damage to your family and friends,” he said.

Weatherill sentenced Earl to six years in prison, adding that she will have access to medical professionals while incarcerated.

He also ordered her to pay $1 million back to AHR, saying, “even if you have little or no ability to pay, because you should be deprived the fruits of your crime.”

This article was originally sourced from www.CTV News.ca