Ardent bettors may add embezzling to problems

Theft: Evidence suggests gambling harms businesses, as workers rob their employers to pay for sprees.

December 28, 2003|By Michael Dresser | Michael Dresser,SUN STAFF

NEWARK, Del. - Victoria Long used to play the ponies every once in a while, but she considered slot machines a game for "idiots."

Then a $300 win at the slots at Delaware Park got her started on a gambling addiction that the once-trusted bookkeeper fed with more than $500,000 she stole from her employer. Now 58, she paid for that crime with almost a year behind bars.

"I turned out to be the biggest idiot of all," she said.

As state after state has opened up to legalized slot machine gambling, cases much like hers have followed - as have jail terms for the offenders and millions of dollars in losses for the victims. In some cases, businesses have been pushed to the brink of bankruptcy and forced to lay off workers, suggesting an economic impact that has not been a big part of the gambling debate in Maryland.

A Wisconsin credit union, for example, went out of business in 1999 after a 64-year-old grandmother stole $289,000 to play the slots. A printing company in Kentucky laid off seven employees after a bookkeeper stole $180,000 to feed slot machines. Long's firm stayed in business but was unable to expand.

FBI figures show that embezzlement has risen nationally since the big gambling expansion of the late 1980s and early 1990s, a period during which most categories of crime decreased. But the figures shed little light on the cause.

The link between gambling and embezzlement is difficult to prove statistically because of variations among states in how they report the crime. Many list it as a theft and don't keep track of whether the crime is motivated by gambling, drugs or garden-variety greed.

The gambling industry says that's the point: Thieves are thieves, and that some are also gamblers is coincidental.

But the anecdotal evidence of a connection is strong. Prosecutors interviewed by The Sun in five states that either have expanded gambling or border ones that have say they have noticed an increase in embezzlements and think slot machines are a factor.

Patrick Youngs, an assistant Rhode Island attorney general who specializes in white-collar crime, says he has noticed a significant increase in gambling-related embezzlements since his state allowed slots in the 1990s.

"When I get cases now, I inevitably suspect gambling is the root," Youngs said, adding that at least 50 percent of the embezzlement cases he sees are related to gambling.

Gov. Robert L. Ehrlich Jr., who is pushing for the legalization of slots in Maryland, insists that the benefits outweigh the risks and contends that slots are no more addictive than other forms of gambling.

The Maryland Chamber of Commerce agrees with him, though some businesses in states where the machines were permitted have come to regret it.

Jack Krantz, who owns the Adventureland amusement park outside Des Moines, Iowa, says he supported the legalization of slots at nearby Prairie Meadows. But, he said, "We really haven't seen any benefit from it.

"We're right next door to a casino, and we've lost four really good employees who never gambled before," he said. All were suspected of stealing from the company to gamble, Krantz says, and two were proved to be embezzlers - one of whom stole $35,000.

In his 30 years of doing business, Krantz says, he never had an embezzlement problem before slot machines came into the neighborhood.

The American Gaming Association, which represents commercial casinos, denies there is any connection. It points to a 1999 study by Jay S. Albanese, then a professor at Virginia Commonwealth University.

The study, which the industry group paid for, concluded that "gambling does not cause white-collar crimes" such as embezzlement, forgery or fraud. It found that forgery and fraud arrests decreased in casino jurisdictions, while embezzlement arrests rose only 1 percent.

That study, however, is based on FBI statistics that other researchers dismissed as flawed by inconsistencies in how local police agencies report crimes.

Melvin Slawik, a gambling addiction counselor who works in the public defender's office in Wilmington, says gambling-related embezzlement "increases every year."

Slawik says there are cases in which the embezzler is basically a crook who just happens to gamble. "The other side is the gambler who violates the law who is basically an honest person - or at least started out that way," he said.

The typical case, Slawik says, is a woman who has been a bookkeeper at her company for many years.

Somebody like Vickie Long.

Always liked gambling

Victoria Webb Long is 58, married for 23 years, a mother and a grandmother. She served 10 months in prison for stealing from Mahaffy & Associates, the Wilmington engineering firm where she kept the books for 13 years.

"I always did like gambling," Long says. "I did grow up in an addicted family - there was gambling, alcohol, all the vices."

For most of her life, gambling was not a problem. She says she would go to Atlantic City maybe once a year or go to the races with friends during the three-month season at Delaware Park.

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