Records reviewed in embezzlement trial
L’ANSE – The trial of the Baraga woman accused of stealing from the auto shop she worked at over a period of two years entered its third day Wednesday with witnesses including a fraud examiner who examined bank records from her tenure and the shop’s co-owner.
Cynthia Wadaga, 47, is accused of embezzling $20,000 or more but less than $50,000 from First Choice Auto Body between June 2009 and June 2011. An estimated $24,000 was taken during that time. If convicted, she could spend up to 10 years in prison.
Fraud examiner John Bengel walked through a number of financial reports from Wadaga’s time at First Choice. He jumped between deposit details, which are reports generated by their Quickbooks accounting program from receipts entered into the system, and the records of the actual deposits made to the bank.
“For the purpose of a substitution examination, these two items are the critical ones and allow me to make a determination as to whether you have an issue or you have no problems,” he said.
In a substitution case, the bottom lines for both will be the same, as would be expected of a normal transaction. But in a regular deposit, the composition of cash and checks doesn’t change between the company’s records and the bank.
In the examples Bengel found, the numbers diverged frequently. There was more cash on the Quickbooks records than what wound up in the bank. To make up the difference, there were checks that had not been entered into the accounting system.
A pair of documents from Wadaga’s first month showed a balance of $1,570.94 on both. The deposit details showed a cash total of $307.32; that amount had shrunk by $4.99. One check included in the deposit details was for $665.77. In the bank deposit, it showed up as $670.76 – $4.99 more.
“It’s a very small amount, but it’s what looks like a test run to me,” Bengel said.
The amounts got bigger. A deposit detail from May 2010 showed a cash payment of $400; that dropped by $352.54 in the bank deposit. The amounts were balanced by adding two checks – one for $41.08, one for $111.46 – and altering another from $1,989.26 to $2,189.26.
Julie Ross, co-owner of First Choice Auto Body, said she and her husband William, who runs the shop, both had administrative passwords for Quickbooks, but Wadaga had been the main user. Ross said she had only used the program “once in a great while,” and had not known her husband to use it. She had never known Wadaga’s password, she said.
Under cross examination, Ross said she could not directly confirm her husband had never pocketed a client’s cash deductible. However, she said, she trusted him.
“I’ve been with him since I was 15 years old – 20 years ago,” she said. “If he were to lie and cheat and steal, I would be the first one not to be with him.”
As he had done with several prosecution witnesses, Wadaga’s attorney, George Hyde, asked Ross about a point in the preliminary examination in district court where her husband had first said he had no Quickbooks password, then reversed himself upon further questioning from Hyde. Pressed to answer if she would consider his statement a lie, Ross said he had simply been mistaken in the testimony.
Hyde questioned Ross’s claims that the business had been struggling as a result of the embezzlement. He brought up a truck that her husband had purchased with $16,000 cash from their personal savings in 2010. Ross said the money had been from their personal account, and kept separate from the business’s finances.
They did eventually have to transfer money from their personal savings to shore up the business near the end of Wadaga’s employment and shortly after, she said.
Three years after Wadaga stopped working for First Choice, Ross said the business is doing “much better.”
Ross said her husband became concerned after an incident in June 2011 in which only two $100 bills were found in their deposit bag when there should have been four.
Upon discovering the discrepancy, her husband was “irate,” Ross said.
Before the incident, Ross said she had considered Wadaga a friend. Wadaga had even babysat for them, she said.
“There was no way I wanted to believe that Cindy could do this to us,” she said.
Wednesday’s proceedings were halted around 4:45 p.m. after Bengel had gone over 15 of 39 exhibits.
The trial was scheduled to resume at 9 a.m. today. It is scheduled to last through Friday.