Sentencing is today in $200,000 fraud scheme

Woman pleaded guilty to bilking nonprofit group

October 07, 2003|By Laurie Willis | Laurie Willis,SUN STAFF

For about 18 months, Bridget Wallace went on a lavish spending spree - including trips to Caesars Atlantic City and a junket to Boca Raton, Fla.

She also frequently withdrew money from the bank, either with an ATM card or personal checks, and spent about $200,000 in all on clothes, computers and home expenses.

The problem is, the money wasn't hers.

Wallace, 44, will be sentenced today for an embezzlement scheme from her former employer at the Johns Hopkins University that caused a major dent in the budget of a national nonprofit organization that researches cancer.

Officials with the American Head and Neck Society at Hopkins, where Wallace worked as a secretary for an official in the organization, say that the money Wallace took amounted to a year of the organization's operating budget and has curtailed their ability to provide money for cancer research grants.

"The society has a reasonably large research investment, so most of the money that we spend on research grants is taken from the income that's generated by the investment," said Dr. Wayne Koch, an ear, nose and throat physician who is an official with the society. "So this has not been enough that we can no longer give grants, but the amount of grants has been curtailed the last few years because of the theft."

Wallace, of the 500 block of Radnor Ave. in North Baltimore, pleaded guilty in July. Koch, her supervisor, noticed irregularities in the office's finances, and investigators later pieced together the story of a trusted secretary who prosecutors say fell prey to greed.

Her attorney, Andrew C. White, said his client feels terrible about the theft and has offered to repay the money.

Hers isn't a case that originated with greed, though it wound up that way, he said.

"The reason this thing started was because her utilities were turned off for nonpayment," White said. "This is a situation involving a hard-working employee who was in financial distress. Imagine coming home at night and having no lights. Unfortunately, situations like this often spiral out of control, and that's what happened."

White said the first check Wallace wrote was to Baltimore Gas and Electric Co., for $2,729.12.

He said some of the money she spent was for legitimate work-related expenses.

Eight-year employee

Wallace, who worked at Hopkins for eight years, is typical of many embezzlers in that she was a trusted employee, said Detective John H. Gipe of the Baltimore Police Department's check and fraud squad.

"Normally in these kinds of situations, it's a trusted employee that no one would suspect, someone that normally doesn't take a lot of time from work," Gipe said. "It's not the highest amount of [embezzlement] I've seen, but it is a large amount.

People who embezzle from their employers usually begin with small amounts and sometimes with intentions of replacing the money before it's discovered missing, Gipe said.

"It always starts out small, maybe taking $20 until payday to pay for lunch or whatever, and you don't get caught," Gipe said. "Then next time maybe it's $40. A lot of time ... it starts out small and grows and grows and becomes easier."

According to court documents, Wallace began bilking the American Head and Neck Society out of money when she cashed an unauthorized check made out to herself for $1,000 on June 26, 2001. Two days later, records show, she cashed another unauthorized check to herself for the same amount.

Then, on July 5, she wrote the unauthorized check to BGE.

The American Head and Neck Society has about 1,500 members, mostly in the United States. The organization gives about $75,000 in research grants annually and also sponsors educational events to help promote the advancement of treatment in head and neck cancer. Examples of cancers that surgeons in the organization treat include cancer of the tongue, soft palate and tonsil region.

In all, Gipe said, Wallace forged 51 of the society's checks for a total of $100,000 that was made payable to herself or others. Court documents show the largest single check she cashed to herself was $5,000, while several of them were for $3,500, $3,000 or $1,500.

Wallace also made purchases with a debit card or withdrew money through ATMs, according to court papers.

Her purchases ran the gamut in amount and merchandise. For instance, she used her company's debit card for a $12.66 purchase at Sunoco on Jan. 7, last year, then used it a week later for a $160.94 purchase at Barnes and Noble, a $95.50 purchase at Leather Outlet and a $49 purchase at Chuck E. Cheese's.

Documents also show two debit charges of $601 each to America West Airlines on Dec. 13, 2001, $1,671.39 to Just Cabinets on Feb. 11, last year, and seven debit card purchases of $194 each to US Airways on Feb. 19 of last year.

`Didn't look right'

Wallace's scheme began to unravel in August of last year after Koch, her supervisor, began noticing "monies didn't look right," Gipe said.

"She would obtain the bank statements, scan them into a computer, alter them, and then she'd print them back out again as if they came from the bank," Koch said yesterday. He said Wallace neglected to pay the organization's bills and then tried to cover up her misdeeds by falsifying bank statements.

"She would generate a check, send it to [Dr. John C.] O'Brien to be signed, he'd sign it, mail it back to her but then she wouldn't pay the bill," Koch said. O'Brien is treasurer of the American Head and Neck Society.

Koch said he decided to go to the bank and get the statements after "so many questionable excuses" by Wallace.

White said he will argue against jail time for Wallace, although he said he thinks prosecutors plan to ask for a two-year sentence.

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