The former general manager of a Michigan auto auction has been sentenced to prison for 23 months to 10 years for embezzling as much as $5 million from the business.
Katrina Stewart, 41, pleaded no-contest to the charge, which has the effect of a guilty plea. Ottawa County Circuit Judge Calvin Bosman is expected to decide in January how much Stewart must repay Grand Rapids Auto Auction Inc. of Jenison, a suburb of Grand Rapids.
Stewart also faces a civil lawsuit filed by the company.
The scheme ran at least three years, the last two of which she was general manager, said Ottawa County Assistant Prosecutor Jon Hulsing. 'When the banks sent documents to the business, she would intercept them and not forward them on to the owner. She had complete control.'
The plan unraveled when the business developed cash flow problems and owner Brent Knapp ordered an audit, Hulsing said.
To hide the embezzlement, Hulsing said Stewart would change banks and accounts, then kite checks until the banks closed the accounts.
'Finally, so many funds were moving around and so much was embezzled, (the scheme) collapsed,' he said. In addition, Stewart wrote company checks to pay personal bills and received several hundred thousand dollars in cash for checks endorsed for deposit only to the company, he said.
Said Knapp: 'Any time you lose that kind of money, it's devastating. All the expansion things you want to do you've got to put on hold because of the money that was taken.'
Defense lawyer Sean Drew of Niles, Mich., said the plea applied to one account involving about $23,000. He said the demand for as much as $5 million is 'bordering on the preposterous.'
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