Accountant sentenced in federal court for embezzling $470K from family-owned business

ST. GEORGE —An accountant currently living in Greer, South Carolina, was sentenced in federal court Wednesday after admitting to stealing more than $400,000 from a small family-owned pool supply business in St. George over the course of several years – a loss that nearly resulted in the shuttering of the business.

5th Judicial District Courthouse, St. George, Utah, date unspecified | Photo by Andrew Pinckney, St. George News

During a hearing held via video feed at the U.S. District Court in St. George, 46-year-old Richard William McDonald appeared before U.S. District Judge David Nuffer for sentencing on one count of wire fraud.  

The government alleges the defendant devised a scheme to defraud Johansen’s Pool Service, where he worked as the company’s accountant, using various means to take money from the company.

From 2016 until the end of 2018, McDonald used a number of schemes to defraud the company, starting with using the pool business’s fuel card to pay for his and his family’s personal travel expenses. He also overpaid himself with unauthorized payroll payments from one of the business accounts he controlled.

He also made bank transfers from the company’s accounts to pay various personal credit card debt, including an $11,720 check that was sent to American Express.   

To conceal the theft, McDonald falsified accounting records to lead the owners to believe the company’s creditor accounts were current. It wasn’t until September 2018 that the owner was notified that several of the company’s credit line accounts were past due, at which point authorities were contacted.

Six second-degree felony charges were filed following an extensive investigation by the St. George Police Department, but once the case went federal, the state charges were dismissed.

During Wednesday’s hearing, prosecutor Jay Winward said the case involves serious honesty and integrity issues. He said Johansen’s Pool Service is a small family-owned business with owners that “work extremely hard.”

Winward described the owners as being “salt of the earth.”

“They are thoughtful, forgiving and kind,” he said, adding that they even offered to settle the matter out of court to lessen the impact on McDonald’s wife and child.

“They are the type of people I hope to become some day,” Winward said.

Stock image by Hussein Kassir/iStock/Getty Images Plus, St. George News

He also said the losses from the theft left the company in dire financial circumstances, forcing one of the owners to take a loan out on his home. The harm left in the wake of the fraud has left the families emotionally and financially damaged, he said.

Winward closed by saying the families deserve to recover their losses and that McDonald “deserves everything the court imposes upon him.”

Sean Brinkerhoff, co-owner of the business, gave a victim impact statement during the proceedings. He said McDonald was not only an employee of the company, but they all considered him to be a friend.

 “And the whole time he was stealing from us,” Brinkerhoff said.  

He also said that had the embezzlement continued for much longer, they likely would have had to close the business and “put a whole bunch of people out of work.” 

One of the more troubling aspects to the case, Brinkerhoff said, was the fact that McDonald could look them in the face even as he stole from them, which he said was “shocking.” 

Brinkerhoff closed by saying that he wishes the defendant well and hopes he is rehabilitated, but the level of deception used to conceal the crimes has left his trust shattered.

McDonald also addressed the court, saying that he feels “incredibly guilty” for his actions and he has spent more than 27 months trying to right the wrongs. 

Addressing Brinkerhoff, the defendant said he was incredibly embarrassed and sorry for his actions, and to Johansen, the defendant stated he was committed to paying the money back and asked that his apologies be given to the business’s employees. 

He said he was deeply sorry for the trust placed in him from a family that he deeply admires that he betrayed.

“My pledge is to pay you back – every cent,” he said. “Showing up today and taking full responsibility is my power.”  

McDonald’s defense attorney, Aric Cramer, requested that his client be allowed to keep and maintain the standard amount of money allowed by the federal facility as he serves out his sentence, adding that any surplus should be turned over to the victims as restitution payments. He also asked the court to allow his client the option of not disclosing his conviction when applying for jobs, as that would likely prevent him from garnering any employment. 

“He needs to work so that he can make restitution,” Cramer added.

Finally, Cramer asked that McDonald be placed in a federal facility located in Alabama to be closer to his family who lives in South Carolina, where authorities say McDonald fled immediately after he was terminated from the company to avoid being arrested.

Federal Correctional Facility in Montgomery, Ala., one of three facilities that will likely house Richard McDonald as he serves out his time | Photo courtesy of the Bureau of Prisons, St. George News

During sentencing, the judge thanked both sides for their work in the case and referred to the presentence report that recommended a prison term of 41-51 months. Nuffer then confirmed with counsel that both sides agreed to a term of 24 months under the terms of the plea agreement. 

McDonald was sentenced to serve 24 months in federal prison and placed on 36-months post-prison supervision by the Bureau of Prisons upon his release. He also ordered the defendant to pay $472,357 in restitution to Johansen Pool Supply in monthly payments of $400 that would start 60 days after his release. He also ordered that anything over $200 received by the defendant per month while incarcerated be turned over to the victims. 

Further, the judge ordered that all of the McDonalds’ property acquired from, or that could be traced back to, the fraud would be forfeited in the case. Nuffer also allowed for a conditional disclosure to future employers as long as his duties “have absolutely nothing to do with the handling of money.” He added that should any risks to future employers be identified, they will be notified immediately by the parole office. 

The government then asked that McDonald not be allowed to make any contributions, including to his church, until restitution is paid in full, a request the judge approved. 

The defendant was ordered to surrender himself by 2 p.m. on Jan. 29 to be transported to one of three federal prison facilities located in Alabama.   

Copyright St. George News, LLC, 2020, all rights reserved.

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