U.S. Dist. Judge Garland E. Burrell Jr. (E.D. CA, G.H.W. Bush) sentenced Gail S. Jones to 2 1/2 yrs In prison for embezzling nearly $1 million in union funds to support her gambling habit. Asst. U.S. Attny. Mark Krotoski told Judge Burrell on Dec. 5 that Jones had quickly her crime to investigators and cooperating with them. Her prison term is the lowest possible under fed. sentencing guidelines. Judge Burrell also ordered Jones to repay $925,443 to the Calif. State Employees Assn. (CSEA), for whom Jones worked for 11 yrs. as a program specialist with responsibilities for cash mgmt., investments and bank reconciliations.
Jones admitted to Sacramento police and an FBI agent on July 22 lat year that she began her embezzlement in 1997 to support her gambling addiction. Hoping to win back the money she stole and repay the union, Jones said she created 236 fraudulent checks to cover he theft. Jones is still eligible for a monthly pension of $1,254. CSEA officials have a civil suit pending with Judge Burrell seeking to stop the pension payments. Judge Burrell said that he cannot divert Jones’ pension to her restitution because the CSEA plan is covered by the Employee Retirement Income Security Act. Jones’ attny. said that she will sign over two checks issued to her by the CSEA after her June 1st retirement, before her embezzlement was uncovered. One check represents the full value of her 401(k) acct. minus fed. taxes, the other from a separate retirement acct. The two checks add up to $70,928.
CSEA officials have fired one employee and demoted another for failing to detect the massive theft. [Sacramento Bee, 12/6/03]