Embezzler sentenced to 68 month in prison for stealing $1.7 million

Friday, August 26, 2016

Stephanie Davis was sentenced to more than five years in prison for a long-term embezzling scheme that netted her about $1.7 million from a medical supply company, Hennepin County Attorney Mike Freeman announced Friday.

Davis, 37, of Maple Grove was sentenced late Thursday afternoon to 68 months, the highest called for under the Minnesota Sentencing Guidelines. In addition, Hennepin County District Court Judge Juan Hoyos ordered Davis to pay $1,087,393 in restitution.

Assistant Hennepin County Attorney Susan Crumb asked for an upward departure to 80 months in prison, which could be allowed since there were aggravating circumstances including the sophistication of the scheme, which lasted at least 10 years, and the amount of money stolen.

“What concerns me is that the behavior continued for years,” Judge Hoyos told Davis. “The amount of money is simply astonishing.”

Davis’ fraud unraveled in January when company officials at Reliable Medical Supply Co. in Brooklyn Park discovered two checks that had been paid from the company account but did not show up as payables in the company records. Davis, who had worked as the company’s accounts payable clerk since 2000, began embezzling around 2005. She set up fictitious vendors in Reliable Medical’s payable system with names that were nearly identical to real, approved vendors.

Davis would make a check payable to herself, but remove it from the batch that the chief executive officer would sign. After the legitimate checks were signed, Davis would forge the CEO’s signature on her check and deposit it into her bank account and attribute that check to one of the fake vendors.

That Chief Executive Officer and founder of Reliable Medical told the judge how Davis’ actions had affected him and his company in a victim impact statement.

“The sheer betrayal changed me,” Jeff Hall said. “I trusted no one. I had to take a leave of absence. She brought the majority of my employees to tears and anger.”

Hall said that early in her career, Davis stopped a forged check and told Hall that, ‘ “no one steals from us,’ “ he said. That convinced Hall that Davis had the best interests of the company at heart. During the deep recession that began in 2008, the company struggled and Hall had to make the tough decision to freeze wages. Davis stole $204,000 that year, he added.

In the meantime, she was taking trips to Disney World, spending New Year’s Eve in Times Square, going to Twins games, Wild games buying cars, boats, snowmobiles and guns for her husband. Whenever Hall would ask her about some of those expenditures, she would say her husband was doing well with his job.

Davis apologized to the court, Reliable Medical and her family, adding that she was “horrified that my stupidity could leave my children motherless.”