A crime both small and big businesses are victims of: embezzlement
The longtime treasurer of a Tri-Cities equestrian club is accused of writing nearly 300 checks to herself to cover personal bills.
Katrine L. Smith, when confronted about the embezzlement, admitted that she knew it was wrong but she needed financial help, according to court documents.
The 48-year-old Richland woman said she paid back the $38,000 she “borrowed” from the Richland Riders Club.
Smith denied taking any more than that, and blamed the club’s turnover in the secretary position and the accounting software QuickBooks for crashing on her. That forced her to use a paper spreadsheet, and that people at the club threw away records.
However, a professional audit of the club’s accounts showed those personal checks written by Smith totaled nearly $117,500, documents said.
That amount included $6,720 — or the $960 each year for seven years that Smith was authorized to be paid for her bookkeeping services.
Prosecutors say that, minus her yearly salary, Smith stole $110,778 from the private club.
Felony theft charge
Smith has been charged in Benton County Superior Court with first-degree theft.
It includes the aggravating circumstance that Smith used her position of trust or fiduciary responsibility to commit the crime, which involved a high degree of sophistication and a greater loss than is typical for theft.
She was sent a summons to appear in court Sept. 26.
Smith’s LinkedIn page shows she works at Columbia Basin College as an outreach retention specialist for the Bachelor of Applied Science degree in Applied Management program.
She also has worked as a community outreach coordinator at Charter College in Pasco, a health and safety director for the Benton Franklin Chapter of the American Red Cross and development director for Special Olympics Washington, the LinkedIn page says.
The alleged embezzlement came to the attention of Richland police on Dec. 1, 2018, when Smith walked into the department’s George Washington Way lobby.
She reportedly had met with the club president a day earlier and admitted the theft. President Shawn Dever gave her 24 hours to turn herself in to police.
Smith claimed the theft started some time in 2013, but court documents state that records show suspicious activity going back to 2011. That is the earliest date of available bank and financial records.
70-year-old horse club
The members-only club was formed in 1949 and owns and operates a 9-acre equestrian boarding and riding facility at 2533 Van Giesen St., west of Highway 240.
It has a volunteer board of directors.
Ground rules say the club “encourages cooperation, quality horsemanship and care of horses, as well as the pure enjoyment of riding.”
When Smith became treasurer in January 2011, the board agreed to pay her $80 a month to handle the finances.
A recent analysis of the club’s books by a certified public accountant show Smith wrote checks to herself as reimbursement for items or services, then wrote checks to vendors for the same items, court documents said.
Checks required two signatures — that of the treasurer and the president — per Riders Club bylaws before it could be issued. But none of the 293 checks written by Smith had a co-signature, documents said.
The club formed a finance committee in 2018, and the members asked for bank statements to reconcile books.
Smith refused to hand over the records or financial statements, leaving the club with long periods of having “no general liability, property, or errors and omissions insurance,” documents said.
Financial discrepancies, unpaid taxes
Dever told police that when he became the club president toward the end of 2018, he started going over financial statements as part of his new duties. He noticed some discrepancies, including a $38,000 cash deposit, according to court documents.
He asked Smith to show him the books and she hesitated, documents said.
Richland police Detective Michael Hayter met with the accountant and board members in May to go over the audit results.
The detective was told that Smith wrote about 60 checks to herself over seven years for $23,110. Those checks were designated for bookkeeping services — $16,390 more than she was authorized to receive in pay during that period.
Eighty-four checks totaling $32,382 had nothing in the memo line, and 16 checks for $7,750 stated they were for “taxes,” court documents said.
However, the president told investigators he discovered the club’s taxes had gone unpaid since 2010.
Smith also wrote nearly $6,000 in checks to herself for “sand” and $1,211 for insurance, documents said.
All the checks signed only by Smith allegedly were deposited into her personal bank account.
A board member told Detective Hayter she was concerned the equestrian club wasn’t the only theft victim since Smith has been involved with several other community organizations.
She added that the club wanted to pursue charges against her.
When Smith allegedly admitted the embezzlement, she claimed she borrowed $38,000 from her mother to pay back to the club.
She later resigned and was terminated.
Smith met with Hayter in June and said she didn’t remember “when she started stealing funds, but it started as a way to pay for personal expenses,” court documents said. “She stated she knew she was not authorized to take the money.”
She explained that the approximately 60 checks labeled for “bookkeeping” were an agreement with the board to compensate her for the cost of barn rent, documents said. She added that deposits should show she paid back that rent.
Hayter reported that Smith could not provide a coherent answer for why she wrote checks to herself in excess of her annual compensation.