Fifteen months later, Frank Kenavan said, the shock is starting to wear off.
Kenavan is executive director and business manager for Warwick Community Ambulance Association, an organization rocked by the September 2009 arrest of his predecessor, James A. Reynolds, on charges that he'd stolen $500,000 in agency funds.
Reynolds used the money to pursue his dream of opening a hunting supply business, buying jet skis, hunting rifles, clothing and more. He was convicted in late October and sentenced to up to five years in state prison.
"It was a slap in the face to just about everyone involved," Kenavan said. "Some people said, 'What were you doing, how could you let this happen?' " But overall, he said, the community was supportive, the losses insured.
"I think there were signs," Kenavan said, "but all his explanations made sense. I don't want to say we were naive — but we were cocky enough to think this could never happen to us."
Over the past few years, it's been happening to a growing number of businesses, nonprofits and individuals in Lancaster County.
Since July 2008, at least 16 individuals who lived or worked in Lancaster County have been charged with or sentenced for fraud or embezzlement of $100,000 or more.
In addition, last month federal officials handed down indictments against five county residents, charging them with taking part in a massive loan fraud at Sterling Financial Corp.'s Equipment Finance Inc., which forced the sale of the firm, parent company of Bank of Lancaster County, to PNC Financial Services Group in 2007.
Local experts and authorities are at a loss to explain why there has been such a spike in major cases in Lancaster County. Greed, everyone agrees, plays a key role; a faltering economy may be another factor, though many of the crimes took place during the mid-2000s, before the downturn.
Others suggest Lancaster County's small-town aesthetic may be a factor. Things like this don't happen here, many believe. That attitude, said Dr. Joe Galante, a professor of accounting at Millersville University and certified fraud examiner, makes it much easier to pull off the crime.
"In a place like Lancaster County," Galante said, "someone with less than ethical standards can have a field day."
More fraud?
Lancaster County District Attorney Craig Stedman said that while he doesn't have exact statistics, "it does appear that we have had an increase in significant white collar cases the last few years."
The Sterling Financial case is perhaps the poster child for this white-collar wave. In mid-November the U.S. Attorney's Office in Philadelphia charged Joseph Braas, Lititz; Michael J. Schlager, Lancaster; Mary C. Stankiewicz, Misty L. Kroesen and Curtis Kroesen, all of Manheim; and three Alabama businessmen with participating in a loan fraud scheme at Sterling subsidiary Equipment Finance Inc., which cost $53 million in losses.
Sterling had acknowledged the alleged fraud in 2007; the following spring the firm was sold to PNC Financial Services Inc., which resulted in 300 Sterling workers being laid off.
Several other local organizations have been crippled by fraud. Officials with the Penn Manor Soccer Club said the club nearly folded after it discovered a former treasurer, Terry Feeser, had stolen some $180,000 from the organization. Feeser, who also stole $120,000 from Landisville Camp Meeting Association, where he served as treasurer, was sentenced to up to 20 years in state prison last December.
The Rawlinsville Fire Company lost members and had problems with fund-raising after its treasurer, Vicki Ann Messier, was charged with stealing $192,000 from the organization between 2003 and 2009. Though Messier was sentenced last month to up to two years in county prison, fire company President Charles Grimasuckas still fumes over "the carnage this worthless product of society caused our organization."
"This affected an entire community not just its fire house," Grimasuckas said.
"Cases such as these stand out because they can devastate a business or organization," District Attorney Stedman said. But the devastation isn't always just fiscal: The profound betrayal of trust inherent in the crimes can shake an organization, even individuals, as much as actual losses.
When banker Nicholas Poneros was sentenced to county prison in July 2009 for fraud, he was described as a good, honorable, kind man. He gave toys to the needy at Christmas; he tirelessly served his church and community.
But he also stole some $110,000 from eight customers at the Manheim Township bank where he was manager, some of them elderly members of his own church. In sentencing Poneros to four to 23 months in county prison, Judge Joseph Madenspacher noted that Poneros took advantage of the very trust he had cultivated.
That's exactly how many pull it off, said Ed McMillan, a certified public accountant and member of the Society of Certified Fraud Examiners who has written a book on "Preventing Fraud in Nonprofit Organizations" and speaks at seminars on the topic.
"I've been involved in about 300 fraud investigations, and I've never seen a perpetrator who didn't have the appearance of honesty," said McMillan, of Forest Hill, Md. "It's just human nature: If you didn't trust me, you wouldn't put me in that position [of trust] to begin with."
Drug habits
On occasion, fraud is driven by addiction. Michael J. Burk was sentenced to house arrest in August after being convicted of buying more than $100,000 worth of merchandise on the account of the Pennsylvania Dutch Convention & Visitors Bureau, where he worked, and selling the merchandise online. Prosecutors said he did so to support a cocaine habit.
Michelle Hildebrand, a former secretary at St. Anne's Catholic School, was sentenced to up to two years in prison for stealing $163,000 in student tuition money to support her family — including treatment for a son addicted to drugs.
But Stedman says avarice is usually the motive: "Most were people who were plain and simply greedy, had the opportunity to take advantage of their positions and then stole from and betrayed their organizations."
Suzanne Youngblood, a professor of criminal justice at Harrisburg Area Community College's Lancaster campus, suggested that people at or nearing middle age are particularly susceptible to the lure.
"When people get to middle age they're thinking, 'Am I ever going to be able to have the things I want?' And you suddenly realize, with a job that pays $35,000 a year you're never going to get it.
"Then you're suddenly entrusted with money, and it becomes very enticing," she said. "You want to fulfill your dreams, and you think you can get away with it."
Many of the local fraud cases saw perpetrators buying luxury goods with the money they stole. Juanita Michelle Piechowski, convicted in 2008 of stealing $620,000 from her employer, Creek Hill Nursery in Leola, used the money to buy an Alfa Romeo sports car, a Ford Mustang convertible — and breast enlargement surgery.
When Vicki Ann Messier was convicted last month of stealing $192,000 from the Rawlinsville Fire Company, she told Judge Dennis Reinaker she took the money to pay her family's debts and save her faltering marriage. Reinaker wondered how the pickup truck and boat she bought with the money fit that explanation.
People who commit fraud "realize that everyone else has a fancy vacation and a cool car, and they say, 'I'd like to have a BMW too,' " said Youngblood. And to retain access to the money they steal, "some go out of their way to maintain a level of trust" and cultivate the impression of honesty.
Small organizations in particular often have no choice but to trust those who handle the money. Volunteers can be hard to come by; and stringent audit procedures often don't exist.
Plus, said Galante, the Millersville accounting professor, there's an inherent atmosphere of trust in many small nonprofits: "You can't accuse Marge — Marge has been with us for 25 years!" Galante said.
And for every case that makes the headlines, Galante thinks there are probably 10 that haven't even been reported to the police.
"Nobody wants to go to the newspaper and hear, 'I guess you deserved this, how could this happen?' " he said. "It's easier to just dismiss the employee and say, 'We'll just eat the rest and keep it quiet.' That's particularly tempting in a small community like this."
Checks and balances
But Kenavan, the Warwick Community Ambulance Association official, said support from the community can also help an organization survive fraud.
"With [the association's] commitment to keep doing what they wanted to do, and the support we got, we got through it," he said.
He also learned a lesson. "I don't want to tell people you have to be paranoid," he said. "But you really do have to know your people, you have to have your checks and balances in place."
But ultimately, he said, "when you put a person in a position of trust, you have to trust them.
"Unfortunately."
LIST OF FRAUD CHARGES INVOLVING $100,000 OR MORE
Since 2008, 16 people here have been charged with or sentenced for fraud involving thefts of $100,000 or more:
• Vicki Ann Messier, 35, of New Providence, sentenced Nov. 18 to one to two years in county prison for stealing more than $192,000 from the Rawlinsville Fire Company between 2003 and 2009. Messier had been the fire company treasurer.
• James A. Reynolds, 40, Lancaster, sentenced Oct. 27 to up to five years in state prison for stealing nearly $500,000 from the Warwick Community Ambulance Association between January 2008 and July 2009. Reynolds had been the organization's general manager, executive manager and treasurer.
• Shawn Chambers-Galis, 48, Mount Joy, convicted in federal court Sept. 9 of embezzling more than $273,000 from Donegal Settlement Services, a firm she co-owned, between 2005 and 2008. She has not yet been sentenced.
• Michael J. Burk, 42, Lancaster, sentenced Aug. 10 to three months house arrest and probation for purchasing more than $100,000 worth of computer and electronic merchandise on the account of the Pennsylvania Dutch Convention & Visitors Bureau, where he worked.
• Dr. Saroj Kumar K. Parida, 50, Manheim Township, sentenced June 16 to eight years in federal prison and three years in supervised release for health care and mail fraud, and ordered to pay $7.1 million in restitution. Parida, a neonatologist, submitted millions of dollars in fraudulent medical bills to 23 different health care benefit programs, including Medicaid, between June 2003 and March 2009.
• Joseph A. Graziola, 35, Lititz, was charged May 20 by federal authorities with mail fraud, allegedly operating a credit-repair business, badcreditbgone.com, collecting $120,000 in payments without ever providing a service.
His case has been referred to federal court in Minnesota.
In a separate case, Graziola pleaded guilty in federal court in Minnesota to defrauding Richfield, Minn.-based Best Buy by submitting fraudulent invoices on behalf of his shipping company for the shipping of electronic equipment that was never performed.
• Melissa Marie O'Donnell, 30, Philadelphia, sentenced April 21 to six to 23 months in county prison for stealing more than $140,000 from the Faulkner car dealership companies in Dauphin and Lancaster counties, where she worked as an accountant.
• Steve A, Brubaker, 56, Elizabethtown, sentenced March 30 to up to 23 months in county prison, plus seven months probation, for defrauding nine clients of his insurance business of $214,000, beginning in 2005. Brubaker convinced the clients to invest in worthless securities, promising to invest in "charity funds" with their money..000
• George L. Clayton Jr., 29, sentenced Jan. 25 to house arrest and probation for stealing $320,000 from Union National Bank in Manheim Township, where he worked. After stealing the money, Clayton forged loan applications in customers' names for about $900,000, trying to cover up the crime. He subsequently jumped off the Columbia-Wrightsville Bridge, but survived.
• Terry Feeser, 53, Willow Street, sentenced Dec. 29, 2009, to five to 20 years in state prison for stealing more than $300,000 from Penn Manor Soccer Club and Landisville Camp Meeting Association. Feeser was treasurer for both organizations.
• Glenn L. Martin, 73, Manheim Township, arrested Nov. 20, 2009, and charged with stealing more than $153,000 from two Park City businesses where he worked as auditor. Martin's case has not yet gone to trial.
• Tiffany Ann Bleacher, 35, of Chestertown, Md., arrested July 27, 2009, and charged with embezzling more than $180,000 from Walter & Jackson Inc., a Christiana-based building supply business where she worked as controller. The case has not yet gone to trial.
• Nicholas Poneros, 67, sentenced July 14, 2009, to four to 23 months in county prison, four years probation and 100 hours of community service for stealing $110,000 from customers at M&T Bank on Manheim Pike, where he was the manager.
• Barry Herr, 63, Lancaster, sentenced Nov. 21, 2008, to 30 months in federal prison for stealing $1.1 million from the Lower Susquehanna Synod of the Evangelical Lutheran Church in America over a period of 20 years. Herr was treasurer for the organization.
• Juanita Michelle Piechowski, sentenced July 8, 2008, to 7 1/2 to 19 months in prison for stealing $620,800 while working as an office manager for Creek Hill Nursery in Leola.
• Michelle Hildebrand, 48, Manheim Township, sentenced July 6, 2009, to one to two years in prison for stealing $163,000 in tuition money from St. Anne's Catholic School from 2004 to 2008. She was a secretary at the school
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