Episode

October 17, 2018
No One Thought We Would Get Caught
Not every fraudster wears a black hoodie. Hear the heartbreaking story of an individual who committed financial fraud from within an institution – how she got there, why she continued and when she knew that she had changed her life forever.
Eric

[00:00:30]

As we continue our series on fraud, one of the perspectives that tends to be missing from this type of conversation is that of the individuals who are committing fraud. This is Eric Hathaway, host of The Finance Frontier. Today I’m speaking with a woman who was intimately involved with fraud from the inside. She committed fraud, was discovered, charged and served time for this offense. Hers is a story of unfortunate circumstances, of choices and regret. Our conversation begins with a phone call.
Faye: Hello?
Eric: Yeah this is Eric Hathaway [crosstalk 00:00:37] …
Faye: [crosstalk 00:00:37] Pretty good. How are you?
Eric: We’re going to refer to this woman as Faye to protect her privacy. Faye has decided to live a lifestyle off the grid and we had a bit of a chance to get to know each other and then I asked her to start from the beginning.
[00:01:00]

Faye:

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[00:02:00]

Okay, well I was in the finance department. I started out in 1993 and as a receptionist, it was in the credit department and prior to that, I worked at a [inaudible 00:01:18] in a personnel department but my life was I always enjoyed to gamble and have fun. When I started, I was a receptionist, then I became the receipts clerk taking money for payments and so forth and I had no problem with dealing with money or anything, but then I had an opportunity to become a loan officer. So I went into that and it was just for small loans and I would pretty much know everybody that I was dealing with. Then I gambled and I admit, I enjoyed gambling but what happened was, a friend of mine that worked there also, we’d always get together after work and go do our gambling and it got a little out of control. Then we’re like, “Wow, where are we going to get some money to cover these checks?”
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[00:03:00]

 

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Now I’m not putting the blame on anybody because I know what I did was wrong, but she suggested, “Oh well, my daughter, if you give her a loan, then we can borrow some money from her.” I was like … I didn’t know for sure but then I was paranoid about doing that because I knew, gosh, that’s wrong but we needed the money. So I said, “Yeah sure,” and gave her a loan and then she gave us so much money from her loan and we were to pay that back, pay her loan so many months so it was caught up. Then we proceeded to do the same thing. Go out gambling, “Well we’re ahead now, we can do more now,” and we never could get ahead, it just got worse and worse and worse. Then I started looking for people that, “Oh my God, now who can I borrow money from?”
Faye:

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[00:04:30]

It got so bad that I even recruited these people to come in, friends of mine or relatives and, “Please, come in a get a loan, I need money for insurance or … ” just things, nothing, I would never say gambling of course. So I recruited people to come in and get loans and my friend, and there were three other workers besides us that … they were like, “Oh that’s good, I’ll have my friend come in or my cousin, my aunt, my mom and you give them a loan and we’ll give you a few hundred dollars.” So I was, “Sure.” I never got caught, so by that time it was like, “Yeah, okay sure. This is a good way to make some money.”
Faye:

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I knew I would never get ahead, but even if I’d win enough to pay my debt, or checks that I wrote, it was, “Oh okay … ” everything was fine then but then it became like every other day we would do this and it just got to the point when … I think this went on for like a year maybe and it got to the point where I was like, “Oh I don’t even care, I’m just going to give this person a few thousand dollars that doesn’t even qualify for a loan.” My boss would never … she didn’t like most people that came in to get loans and I was the officer so I thought, “Why do I have to ask her permission to give these people a loan?” So I just started just going past her and saying, “No, I’m going to give you this loan.” You know, because I needed it too.
Faye:

[00:06:00]

I don’t even know how many people I did this to it was so out of control. It must have been once a week we were doing this. After a while, I got to the point where I didn’t even care. Just come in, you go to the bank, cash your check and give me some money.
Eric: I asked Faye if any of these loans started to pop up as flags for not being repaid.
Faye:

[00:06:30]

I mean, I never forged people’s loans, I didn’t do anything like that. I just had them come in and promised them some money. Well I would set up payments for the loans and sometimes I’d make them an annual payment due, or we would have them pay so much on their loan and we’d pick up the rest of it. So we were pretty good about making payments for a while and then it just got to be too much, where … well, we didn’t have the money to do that even.
 

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The friend of mine was working in the same department and she was the finance officer. She took care of the books and things like that and I don’t know what she did, to be honest, I know she adjusted books but I never did question her about it because she was like a type of person … I don’t want to put blame on her but she bullied me. Like saying, “Oh if you don’t give this person a loan, you’re a wimp.” And stuff like this, and, “You’re just scared of the boss.” So I’d do it and I didn’t ask her questions about what she did. The other people in the department, same department, they … I don’t know how they found out, but … I think I would say to them, “Oh jeez, if you need some money, tell your mom to come in and I’ll give her a loan.” Then they would be responsible for that.
Eric:

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Did you ever say, “We know this is wrong, we’ve got to stop doing this.” Was there ever that point? Or did it become so easy and something that just became normal that you just kept rolling with this?
Faye:

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I think there was a few times when … well even myself I’d say, “Oh this is it, last person. This is the last person I’m going to ask for any money.” Then something else would happen and, “Oh well.” One gal did this, I kind of set her up to where I said, “Have your brother come in if you need some money.” So she would be in on it, you know, so if she found out I’d have said, “Well you did that with your brother.” It was like, “You did it now so you can’t tell on us.” I don’t think that anybody really thought about getting caught.
Eric:

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Faye wasn’t the only one who was involved in this fraud scheme, there were five total employees who appropriated nearly $150,000. When they were discovered, all five were fired. Faye told me about the moment that she was discovered.
Faye:

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One gal, her brother’s wife had found out she got money from him and she was very irate because she didn’t have anything to do with it, she didn’t get any of the money and so she reported it to our boss and then they started to … I know I was acting suspicious a lot of times and I could tell that my boss was kind of looking at me like … because we were good friends, her and I and she would ask me a few questions like, “What did you do? How many loans did you give out today?” Or, “Why did so and so come in here … “
Eric: Faye was eventually reported to management, who started digging around.
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Faye:

Then one day, I was called over to the main office there and my boss was sitting there and I was like, “What’s going on?” I knew at that time, “Oh this is it, we’re done.” Then that’s when it all happened.
Eric: Faye’s accomplice never showed up for work that day and neither did one of the others, someone had tipped them off.
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Faye:

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So I had to go over and be interviewed by the police department and they read me my rights and started asking me about loans and the reason … that’s why I was brought into the office and they were asking me names and, “Do you know … ” They had everything together because the Feds had been investigating and I didn’t know, I don’t know how I couldn’t have but I didn’t. So then I was free to go and I went back to my office and my boss had a letter for me saying that I was suspended because I had told them everything, the police department, I said, “Yes, I did give these people loans and so many of them that I could remember.”
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Eric:

Faye shared her side of the story with the police. Eventually, she got a letter indicating that she was fired, along with the other four individuals involved. Then the waiting started.
Faye:

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It was quite a while before I knew anything was going to happen. I just knew that I was in trouble and I don’t think I really knew the Feds were involved and I heard that and then it was also on TV and in the newspaper but then, it must have been maybe three months, something like that I want to say that … it might have only been one month, I can’t remember, but the Feds came out to see me then, out where I was living. They asked me questions and I was honest with them and then they said they would … I think that I would have to get a public defender or an attorney and it seemed like forever after I met with my public defender that this all took place because there was hundreds of pages of paperwork. I was honest with him and, oh man, it must have been six months maybe or longer than that, I [crosstalk 00:12:59] …
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Eric:

Six months or more, she can’t quite remember, of waiting. Eventually they went to court and she was advised to plead not guilty.
Faye:

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All these charges, they said there was hundreds of counts of embezzlement because they were counting each person as a separate charge and that really did scare me because on the guidelines for federal felonies, it’s so many points for so many years in prison and everybody told me, “Oh no, you’re not going to prison, don’t worry, you’re not going.” So we had the one where I plead not guilty and then we had to wait for another date to go to court.
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Eric:

More paperwork, more meetings, another court date. This time, Faye plead guilty.
Faye:

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I plead guilty, my attorney told me to plead guilty and he would try to get it down to a minimum amount of months but still, I had no idea prison time was going to be there. The other gal, she was going through the same thing but she didn’t have to worry about the prison time, so I went that one day, my sister was there I remember and everything, and stood up there and said I was guilty and then the judge charged me and according to the scale, how many points I had, that I was to go to prison for nine months. Right there it just hit me that, “Oh my God, what did I do?” That’s when it hit me the hardest, I think that, “What did I do? Why did I do it? What am I going to do about my mom?”
Eric: She didn’t go to prison right away, she was sent home to wait. The system didn’t have room for her, so she spent two years in limbo, knowing that she had to serve time but not knowing when or where.
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Faye:

That was really hard because it was hard for me to be around people.
Eric: More time had passed. Faye had lost her house and then her mother and one of her daughters moved to Nevada. Faye thought about it for a while and then she got the okay from her probation officer to move to Nevada and join the rest of her family.
Faye:

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That’s good for me to go to Nevada with all the gambling but I went and I lived there for about a year, I’d say. Day I got fired, I got to tell you, I didn’t know where to turn, what to do, so I went down to the casino and I wrote like $3,000 worth of checks and blew it all and sat there by myself because I had so much on my mind that gambling just zoned my right out. Just sit there and for hours and not have a worry on my mind.
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Eric:

I asked Faye if she ever thinks about what would be different today if she had made different choices in the past?
Faye:

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Well I would still have my home, I would still have my job, I would probably be higher up in my position, making more money, I could walk around town. I live in the same city now that I lived in where this happened and I don’t go out very much at all because I don’t want to run into people and I know people, they don’t judge me, a lot of people, because I have some very good friends and family. They stood by me but I just choose not to be in the middle of it.
Eric: Faye says she wished she would have gotten help. If she could go back in time, she’d have some advice to give her younger self.
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Faye:

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Well for one, I would say, get help with my problem. Whether it be gambling or alcohol or any sort of addiction. Seek help immediately before it goes too far, because now I know, no matter what you do, you’re going to get caught. Whether you think it’s right, if you think, “Oh well, this is only one time, it’ll never happen again so I’m going to make it through it.” It won’t be right because it’ll weigh on you for a lifetime.
Eric: Faye doesn’t know what became of the people that were scammed. She doesn’t think they ever fully untangled all of the fraud from these loans.
Faye:

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It was a real big mess. “Well we’re going to just stick a number on how much each of them … ” the two of us owe. “We’ll just put a number down and have that on record,” and that’s what their restitution will be.
Eric: There is unfortunately no happy ending to this story. Not for Faye, not for the people affected, or for her family but it seems for this woman, who spent years holding her story inside, it was at least something to share with the world.
Faye:

[00:19:00]

People need to know that you can’t let other people influence you and then get you in so deep that you can’t get out and then nothing really happens to them. So you got to know to stand up for yourself and do right, and talk to other people about it.
Eric:

[00:19:30]

Thank you to our guest for sharing her story today, and to the family members who worked with us on this episode. Thanks to our producers, sound engineers and the team for putting this interview together and thank you for listening. I’m Eric Hathaway and I’ll be back on the next episode of The Finance Frontier.
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