A woman is facing a federal charge in the theft of more than $300,000 from a Franklin construction business.
Erica Howard, 30, of Indianapolis, has agreed to plead guilty to a federal felony wire fraud charge, according to a news release from the United States Department of Justice.
The theft of an estimated $315,000 forced Dukate Fine Remodeling to lay off three employees and the owners had to use their retirement savings in order to keep the business running, the release said.
The company has not been able to hire back those employees, owner Mike Dukate said.
Dukate estimates the company had to spend about $400,000 to repair the damage done by the theft, which included state, federal, payroll and property taxes not being paid. They were getting calls from companies about unpaid balances in the thousands and didn’t know their account passwords because they had been changed, he said.
“For a few months, we were not even sure we were going to be able to keep our doors open,” Dukate said.
Howard, who has prior convictions for fraud, forgery and theft, faces up to 20 years in federal prison and restitution for the full amount, the release said.
Investigators with the Franklin Police Department and the Federal Bureau of Investigation began looking into the case when a company check bounced. They found that Howard had been using company funds to pay her bills and buy items for about two years, the release said.
Starting just months after she began work as a bookkeeper for the company, investigators found that Howard had used company accounts to pay for more than a dozen credit cards, along with electronics and other items she bought online. She did not track those expenses. Instead, she created false records for the company’s accountant, along with fake bank statements that she had created to make the numbers match, the release said.
By the time the theft was discovered, the company was missing $315,000.
“Fraud on a small business often impacts much more than the bottom line,” U.S. Attorney Josh Minkler said in the news release. “It also breeds distrust, especially when the fraud is perpetrated by a trusted employee. People who exploit a position of trust for purely personal gain will be held accountable to the fullest extent of the law.”
But the theft also had a silver lining because vendors, subcontractors, employees and friends all came to help, including offering to help pay expenses, paying for jobs up front and pushing up projects they weren’t planning to do as soon in order to help the business keep running, Dukate said. The company also didn’t lose any vendors or clients, he said.
“They just stepped up on our behalf,” Dukate said.
The company also learned and changed its practices, he said. Dukate had called three past employers of Howard and all gave glowing reviews, he said. The company had never done background checks before, but would have found out about Howard’s past if they had, he said.
“We’ve learned a lot, and we’ve changed our practices since then,” Dukate said.
