Last updated on July 2nd, 2019 at 09:19 am
Two former Robert W. Baird & Co. employees exchanged login information to manipulate tax withholding information, allowing them to steal more than $1.1 million from the company over seven years, according to federal court documents.
Rochelle Matthews and Linda Whitmore have both signed plea agreements admitting to wire fraud. The documents were filed last week in the U.S. District Court for Eastern Wisconsin. Both women face up to 20 years in prison and a $250,000 fine, along with potential restitution payments to Baird.
A request for comment from Baird was not immediately returned.
According to the agreement, Matthews, a financial system manager, and Whitmore, a payroll associate, exchanged logins to get around internal controls aimed at preventing the manipulation of withholding records.
The women manipulated the records to inflate their tax withholding. When the third-party firm that handled payroll taxes sought additional money to cover the taxes, the women used funds from one of Baird’s liability accounts to cover it, according to federal court documents.
The following quarter the women would reverse the fraudulent holding accounts, prompting the third-party firm to return the money. Since the women were the only ones to know the money was returned, they were able to steal enough to cover their legitimate income taxes by adding it to their regular salary, the agreement says.
The scheme went on from 2005 to 2012, during which time the women also took money from a charitable contributions account and made false statements to get paper checks issued to them.
The agreement says the women stole more than $1.1 million during the seven years, including $679,043 going to Matthews and $440,441 to Whitmore.
Matthews was fired in 2012 after the company found her using a Baird credit card for personal expenses, even though she paid that money back. The scheme was discovered when Whitmore was moved to a new position for unrelated reasons. The agreement says her successor discovered the unexplained payments to Whitmore, which led to Matthews’ thefts also being discovered.
The women also submitted letters of acceptance, waiver and consent with FINRA in 2014 barring them from association with any members. Those documents put the amount stolen at around $1.3 million.