Sentence order in embezzlement case includes $26,000 in restitution
A former Luverne man appeared for sentencing in Rock County District Court Monday for his role in a felony case of corporate theft.
After a three-year investigation covering more than four years of alleged embezzlement, Jeff Wilsey, 52, now of Brandon, was charged Sept. 8, 2014, with theft for diverting corporate property.
The complaint stated that Wilsey “appropriated funds of Hills Stainless Steel to his own account by way of having checks from customers for trailer sales/leases being made in his name instead of the company’s.”
Wilsey initially entered a not-guilty plea on Nov. 11, 2014, but a jury trial scheduled for March 5 and 6 was canceled after a settlement, and during a March 30 hearing Wilsey entered a guilty plea.
Conviction of a corporate theft charge alleging a value of $5,000 or more is a felony that carries a maximum penalty of 10 years in prison, a $20,000 fine or both.
But during Monday’s hearing, Judge Terry Vajgrt stayed the imposition of a sentence contingent on a number of conditions.
Among other things, Wilsey was ordered to serve 90 days in jail on a staggered term.
The first 30 days must commence within 30 days and may be served in Minnehaha County if the sheriff there agrees to it and if Wilsey pays his own expenses.
Of those first 30 days, Wilsey will be given credit for two days already served and possibly 10 days for good behavior.
The second 30-day term would start in one year, unless probation recommends the remaining jail time be abated.
The final 30-day term would begin four years from now, unless it’s abated.
During Monday’s hearing, Wilsey apologized in court.
“I’m sorry for the mistake I made, and I’m willing to pay for the mistake I made,” Wilsey said. He also asked for a merciful sentence, saying that he hoped he could continue working through work release.
The sentence order does allow for work release, provided he’s eligible through probation and jail.
Ordered to pay more than $26,000 in restitution
Wilsey’s theft conviction stems from criminal transactions that took place from around Jan. 1, 2008, through May 15, 2012, at Hills Stainless Steel in Luverne where he was employed nearly 17 years as a sales and lease representative.
The evidence showed Wilsey embezzled more than $5,000 over several years essentially by pocketing the first few months’ payments of a lease agreement that on paper wouldn’t be documented to start until later.
For example, a lease agreement that started in May wouldn’t be documented for the company to start until July.
The criminal complaint chronicles a trail of evidence and tips — some anonymous, some on record — about Wilsey’s business practices.
While the earliest evidence dates back to 2008, company officials said they hadn’t become aware of the problem until 2011.
At that time, an anonymous letter accused Wilsey of stealing from the company, but accountants were unable to prove it.
In 2012 a long-time customer mailed Hills Stainless Steel a check for $3,000 implicating Wilsey in a corrupt business deal. The complaint states that Wilsey denied knowing what the check was for.
Another customer called Hills Stainless Steel to inquire about company rebates or incentives for sales and leases. When the customer was told there aren’t any, he told Hills Stainless Steel that he had leased two trailers in 2009 and had received a check for $5,000 — $2,500 per trailer.
The customer told the company that Wilsey instructed him to send $2,000 of that in a check to Wilsey for his commission, which he did.
After this, Hills Stainless Steel reportedly began monitoring Wilsey’s transactions and conducted an inventory that revealed a missing trailer.
When asked about it, Wilsey provided the name of the client, but said he must have forgotten to invoice him.
The client told Hills Stainless Steel Wilsey had demanded the first month’s check be written to him (Wilsey), but the client said he refused and told Wilsey he would pay when he was properly invoiced.
Company officials later told law enforcement they believed Wilsey never invoiced the client in order to keep him quiet. The client said he didn’t call the company — or pay for the trailer — because he believed it was Wilsey’s problem to correct.
Other customers offered information about Wilsey instructing them to leave blank checks with the drivers, and Wilsey would write his name in and cash it himself.
Over the final several months of 2012, the Rock County Sheriff’s Office and Hills Stainless Steel officials attempted to investigate the extent of the embezzlement.
The complaint states, however, that “it was eventually determined there was too much to go through and Hills Stainless did not have the time or resources to provide much more information.”
Investigator Jeff Wieneke followed up on leads and interviewed clients who had been referenced to that point, and in April 2014 a client called Hills Stainless and asked if “Jeff Two Check Wilsey” still worked there.
When asked what the caller meant, he indicated that he had to write a separate check to Wilsey when they got a trailer from him.
The customer provided a photocopy of a cashed $2,000 check written to Wilsey with notation “trailer” in the memo. The customer also provided the rest of the paperwork from the transaction showing a trailer sale in 2010.
The court document concludes by saying, “It is believed the defendant (Wilsey) had been performing this double check writing scheme and forward dating agreements for many years and with many customers.”
The report recognized that more leads could have been pursued, but that investigators decided to file charges with the evidence they had.
“Hills Stainless has indicated that they do not have the staff or the time to investigate any more customers,” the complaint states, “and the BCA staff was assigned elsewhere and couldn’t investigate further.”
Judge suggests sale of Corvette to pay restitution
An important part of Wilsey’s sentence is that he pay $26,474.48 in restitution owed to Hills Stainless Steel.
Judge Vajgrt said he may pay it on a schedule set up through probation, but it must be paid.
“I will be paying very close attention to the balance of restitution owed when I consider abatement (of remaining jail time),” Vajgrt said.
He said a good place to start would be for Wilsey to sell his Corvette, since it’s a second vehicle that isn’t needed for daily transportation.
“I’d suggest you sell that vehicle and get the victim paid sooner, rather than later,” Vajgrt said. “That needs to be your first priority going forward.”
In addition to jail time and restitution, Wilsey was ordered to pay a $1,000 fine and submit to five years of supervised probation.
He must also submit to chemical use and gambling addiction assessments, and pay for them and abide by their recommendations.