NL courts see frequent embezzlement cases
By Karen Florin
Published 11/20/2009 12:00 AMUpdated 11/20/2009 01:41 AM0
The scenario has become all too familiar in the corner of the state that houses two of the world's largest casinos: Longtime employees, seemingly above suspicion, embezzling hundreds of thousands of dollars to feed a gambling addiction.
Two such cases came to light in the past two days in New London Superior Court.
On Thursday, the former business manager for the Lakeside Condominium Association in Gales Ferry was arraigned on charges of first-degree larceny and third-degree forgery.
Cynthia S. Eddy, 52, of 9 Tanglewood Drive, Preston, broke down and admitted her gambling addiction when she was confronted by condominium association officers and Ledyard police, according to an arrest warrant. She is accused of stealing $294,400 from the association between 2005 and May 2009. During the same time period, she lost $226,400 in slot machines at Foxwoods Resort Casino and $63,884 at Mohegan Sun.
The condominium association began investigating in May, when Bank of America contacted it about "inconsistencies" in the association's bank account. Bank officials produced a number of checks made out to Eddy that contained forged signatures of association officers. A forensic auditor commissioned by the association found that Eddy made $294,427 in unauthorized disbursements.
Eddy, who had served as the association's business manager since 1984, was responsible for handling maintenance requests, collecting association fees and paying bills. In an interview with Ledyard detective Richard J. Pasqualini Jr., she admitted writing checks to herself, forging the required signatures of two condominium officers and recording the withdrawals as vendor payments.
A day earlier, 53-year-old Beverly Howard of Westerly was charged with embezzling $334,778 while serving as the dining services director for the company that runs the food service program at East Lyme schools. Her gambling losses amounted to more than $381,000. She admitted she had played slot machines at both of the area casinos with cash she took out of cafeteria revenues before making the daily deposits into the school lunch fund. She said she created false deposit logs to cover the thefts.
Spike in cases
A 2009 gambling-impact study commissioned by the General Assembly and performed by New Jersey-based Spectrum Gaming Group revealed a 400 percent increase in embezzlement cases in southeastern Connecticut since Foxwoods, the older of the area's two tribally owned casinos, opened in 1992. Police made 43 embezzlement arrests in 1991, the year before Foxwoods opened, and 214 in 2007, the report says.
The local court system does not have the technology or staffing to keep a running database of gambling embezzlement cases, but the attorneys who have prosecuted and defended these clients, and the judges who have sentenced them, have gained a solid working knowledge of this type of crime.
"These cases just fit the pattern we've seen for a long time now," said Lawrence J. Tytla, supervisory assistant state's attorney in New London Superior Court. "They are people with no criminal record, with responsible jobs, that apparently get involved in gambling, lose control and find themselves committing crimes to support their habit."
Defense attorneys now routinely advise their clients to begin problem-gambling treatment before they appear before a judge. New London Judge Susan B. Handy, who has sentenced gambling-addicted town tax collectors and accountants for embezzlement along with car-dealership managers, private-duty nurses and others who stole from private companies, often references the "template" of these defendants. They are usually female, though not always. They are typically middle-aged and older, have no criminal history and, until now, have "been an exemplary and giving individual."
'How could they?'
While those involved in the judicial system have gained a better understanding of the problem, the public at large does not grasp the nature of gambling addictions, according to those who work with problem gamblers.
"How could they?" is a typical reaction to news of an employee's embezzlement.
"I think what most people don't appreciate, including many clinicians, is the biological aspects of problem gambling - that gambling changes somebody's internal neurochemistry the same way substances do," said Lori Rugle, director of problem gambling services for the state Department of Mental Health and Addiction Services. "The brain gets hijacked just as it does with alcohol and other drugs. The thinking becomes very irrational when you add the gambling and the desperation and the anxiety and confusion. People cannot really think straight under the influence of gambling. Their brain goes on tilt."
Rugle, whose staff works with many of the trusted-employees-turned-thief, says once the gambling addict has stopped gambling, they too, ask, "How could I?" The gambler steals with the intent of borrowing the money temporarily, winning, and then paying it back, she said. That outcome is rare, indeed, but the gambler does not see any other solution, she said.
"The delusion increases as the desperation increases," she said. "Their brains kind of get locked in."
Another typical reaction to gambling embezzlement is to ask whether the casinos could have done something to prevent them. Marvin A. Steinberg, executive director of the Connecticut Council on Problem Gambling, says the Connecticut casinos have done more to prevent problem gambling than most. The casinos fund a large portion of the council's budget.
All of the country's large casinos gather enormous amounts of information about their guests through player's club databases, Steinberg said. The casinos track how much the player's club member spends on each visit and what games they like to play. The casinos reward the players with "comp" points and use player gambling profiles to devise targeted marketing programs.
"One of the problems the community usually has is, if they are gathering that much information about someone, they ought to know that people can't afford to be doing what they're doing," Steinberg said.
Many people think the casinos should "flag" patrons whose losses are "increasing and increasing and increasing," he said. But every player has a different amount of money they can afford to lose, he said. In any case, the casinos here and everywhere, like other businesses, have not opened their proprietary databases to anyone.
"I'm not saying that if they opened up their databank to me or anyone else I could tell you who the compulsive gamblers are," Steinberg said.
Steinberg said both of the local casinos have provided training to shift managers and other employees to help them recognize and deal with problem gamblers. He said the casinos have called him to consult with gamblers in crisis, though it is rare.
The casinos prominently display the state's problem-gambling hotline number on ATM machines and elsewhere and offer patrons with gambling problems the option of excluding themselves from their properties.