A dealer's nightmare: $2 million embezzled

by admin September 26, 2016 at 8:12 am

DeAnne Ogden, 54, pleaded guilty and was sentenced to eight years.

Last October, Ford dealer O.C. Welch and his service manager noticed that gross profits weren’t as high as they should have been based on the number of repair orders.

They scrutinized the books at O.C. Welch Ford-Lincoln in Hardeeville, S.C., and found payments to nonexistent vendors. The trail led to Assistant Comptroller DeAnne Ogden.

When Welch questioned Ogden about the discrepancies, she denied any wrongdoing. Then she stopped talking. Welch fired her.

The police determined Ogden had embezzled nearly $2 million from the dealership over seven years. Ogden, 54, was arrested in February and pleaded guilty to the thefts on Sept. 15. She was sentenced to eight years in prison.

“It’s a pretty big drain on me mentally, emotionally,” said Welch. He said he lost 26 pounds and was down to two hours of sleep a night during the investigation.

Welch considered Ogden, who worked for him for more than 10 years, a friend. For Ogden, who earned about $58,000 a year, embezzling funded a lavish lifestyle.

She bought high-end furniture, jewelry and vehicles, paid for expensive home improvements and put a down payment on a house for her daughter, said Assistant Solicitor Francine Norz, the white-collar crime prosecutor in the case. Ogden paid off credit-card bills of about $1 million, investigators said, and created fraudulent records showing the money was paid to parts vendors.

“It was a lot of basically living beyond her means,” Norz said. “It’s not hard to spend money when it’s not yours.”

As part of a plea agreement, Ogden turned over assets valued at $856,759, including her house, a vacant lot next door, furniture, a 2012 Ford F-150 Raptor pickup, a 2015 Lincoln Navigator SUV, a recreational vehicle, two golf carts and her 401(k) account. The items went directly to Welch, who aims to sell them by year end. Ogden’s daughter signed a promissory note to Welch pledging to repay him the $21,919 used for her down payment.

Welch was able to get some of his money back from banks, but after Ogden’s prison term, she must serve five years of probation and pay remaining restitution of $572,085.

Welch, who received a 2016 Ford Motor Co. Salute to Dealers Award for community service, doesn’t think he’ll ever see the rest of the money. He filed an insurance claim, getting about $200,000, but he doesn’t expect the items turned over to him will sell for their claimed value. But he takes satisfaction in having prevented Ogden from stealing from others.

Welch: Mental, emotional drain

“A lot of these people go somewhere else and steal from that place,” Welch said. “The thing you need to do with these people is put them in jail and keep them there.” 

That doesn’t always happen in auto retail. Dealers sometimes would rather just fire the employee, file an insurance claim and move on, dealership accountants and lawyers say. Sometimes, with a trusted longtime employee, deciding even to investigate suspected embezzlement can be a wrenching decision. 

Though he’s getting some of the money back, “it was a pretty big hit” to the business, Welch said. Still, Welch said his dealership is in good shape and on track for $120 million in revenue this year. 

Going forward, he hasn’t changed his business practices much other than to “verify what the person does,” Welch said. “Lots of people don’t do that.” 

He added, “The only mistake I made is I trusted somebody, and I didn’t verify what I trusted.” Welch, who says he personally sells about 500 vehicles a year, said he spent “way too much time selling cars instead of running my business.” While he hasn’t dialed back his own sales activity, he’s keeping better tabs on what employees do. 

Now, he said, “I oververify.”

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