A former bookkeeper for Simply Smashing, Inc., a successful t-shirt company in Oakhurst, pled guilty April 7, to two grand theft embezzlement charges and two felony identity theft charges after stealing $685,000 between 2007 and 2012 $325,000 from Simply Smashing and an additional $360,000 from a Fresno real estate investment business.
Sue Tashima (previously Sue Caldwell) was arraigned in Fresno Superior Court before Judge Arlan Harrell Monday after turning herself in and pleading guilty to the embezzlement charges and identity theft. Tashima was released on her own recognizance Monday and will return to court on July 21, for sentencing.
As part of a plea bargain, Tashima made partial restitution payments during the proceedings of $100,000 to each of the businesses. At her sentencing, she is expected to receive four years in the Fresno County jail, and three years under mandatory supervision.
She was represented by Fresno attorney Jeffrey Hammerschmidt.
She accepts responsibility for her actions and $200,000 in restitution was paid to the victims at the hearing Monday, Hammerschmidt said.
Tim Fruehe and his wife, Barbara, are the owners of Simply Smashing, a promotional products manufacturer in Oakhurst established in 1996, known for smashing t-shirts into various shapes for companies across the country. The other victim, The CVI Group, is located in Fresno.
According to Tim Fruehe, Tashima came to work for his company in 2006, after relocating to Oakhurst from Watsonville, as a part-time bookkeeper after answering a help wanted ad in the Sierra Star.
We hired her based on her supposed spotless background, 20 years of bookkeeping experience, and her charming personality, Fruehe said. Sue quickly earned our trust and appeared to be saving us money through her efficiency and skill. Everyone loved her. Like most employees at a small business, she became like family to us you would never guess she was stealing thousands and thousands of dollars from us.
Fruehe said within a week of taking over the accounting department, Tashima took $6,500 through an extra payroll check to herself.
She blended that check in with other payroll checks from another department so it would not readily show up on our profit and loss statement, Fruehe said.
Fruehe said that in 2007, Tashima was making about $25,000 working part-time, but after taking over the department, she finished 2007 with double her income by stealing an additional $25,000 from the company in the last three months of the year.
Fruehe said Tashima was stealing about $5,000 to $10,000 a month for about four years, during a time many businesses across the country were struggling through one of the worst economic downturns in the countrys history.
From 2008 to 2010, we were blaming our losses to the recession at the time and never even considered to look at our trusted bookkeeper.
Fruehe said what was going on at the time was like a bad TV movie with a script hard to believe.
She took three of my employees to Las Vegas to celebrate her birthday in 2009, Fruehe said. They went to Vegas, had suites at the Venetian Hotel, and partied with Simply Smashing money.
Fruehe said Tashima volunteered to baby-sit his children, bought gifts for a grandsons baby shower, and bought him and his bride Barbara a nice gift basket to take on their honeymoon when they were married in 2009.
Due to the business losses, we got married at the court house in Mariposa and could only afford to spend one night in Yosemite for our honeymoon, Fruehe said. Eight months later she invited us to her $60,000 wedding on July 4, 2010, to Glenn Tashima a wedding we now know was paid for with our money. She bragged about buying Glenn a Rolex watch for a wedding gift and loved showing off her $20,000 wedding ring. She said her new husband was a wealthy businessman in Fresno and she was getting an early inheritance from her family in Watsonville stories that have proven to be false.
Fruehe said by 2010, the companys finances were getting so bad he started liquidating personal assets such as two homes, and $150,000 from his retirement savings in order to keep Simply Smashing in business and his employees working.
While we were selling our homes, and cashing out 401Ks and IRAs on her advice, she (Tashima) was very sympathetic to the troubles we were going through and told us she would do everything she could to help us, including cutting her hours back, volunteering to go on unemployment, and getting a part-time job in Fresno, Fruehe said. The reality was Simply Smashing had no money to steal and she needed a new source of money to maintain her extravagant lifestyle. Fruehe said Tashima took a part-time bookkeeping job in Fresno in the beginning of 2010, and once again began playing with the books.
According to Fruehe, additional financial problems were hindering the company due to Tashima, including a Xerox lease default resulting in a $400,000 judgment against Simply Smashing, default on credit lines, $13,000 in unpaid property taxes that Tashima never filed, more than $200,000 in supplier debt all leading Fruehe to file Chapter 7 bankruptcy in late 2011.
At that time, Simply Smashing was just a remnant of its former self, yet still in business ... barely, Fruehe said. Fruehe said Tashima stayed part-time with Simply Smashing through the end of 2012 to keep the company from hiring a new bookkeeper who might discover what she was doing.
It was about that time that, according to Fruehe, that the Fresno company discovered the loss of funds due to Tashima. It was in June of 2013, when Fruehe got a call from Fresno Police Department Financial Crimes Unit Detective Teri Terry. She told me that while she was investigating a Fresno embezzlement case involving Tashima, she came across Simply Smashing canceled checks totaling about $70,000 from January through July 2010.
I knew something was wrong since I knew she only made about $15,000 that year being part-time, Fruehe said. I went and checked some of our records and bank statements, and I immediately knew we had a big problem much bigger than the detective knew at the time. Within two hours, I discovered more than $200,000 in theft and in the following weeks, we reviewed every bank statement from 2007 through 2012 and found $325,000 in theft, along with forgeries and doctored bank statements.
Fruehe said at the time, the company was doing about $300,000 a month in sales, and missing $5,000 to $10,000 a month was not as detectable as one would think, especially when it is buried in a multitude of expense and payroll accounts that made the company expenses appear a little high.
As an owner of a small business, you are more focused on how you can grow sales and cut expenses to make a profit ... not suspecting your long-time, trusted bookkeeper having ruthless criminal intent.
According to Fruehe, Tashima and her husband may face further legal action including tax evasion.
We plan on pursuing this through civil suits to assure we get complete restitution and damages, Fruehe said. She has no remorse for what she did to me, my family, my employees, our company, and even our small community. We have all suffered. She was evil hiding behind a big smile I dont know any other way to put it.
Im telling this story so other small business can be aware of what can happen to them once someone steals your trust, Fruehe said. No matter how good you think your bookkeeper is, or how much you trust them, you better be routinely checking your bank statements. Unfortunately, this is an all too familiar story that has been repeated over and over throughout history. If we had just implemented a few theft prevention polices and procedures it would have saved both companies a lot of money. Weve made it through the worse time we survived this unimaginable nightmare. We certainly learned some important lessons ... to survive, we made some adjustments in how we do business and today the company is more efficient than ever and we plan on becoming a bigger and better company after all this.
Simply Smashing and The CVI Group were represented by Fresno attorney Michael Elder of Purvis & Elder. The case was prosecuted by Fresno Assistant District Attorney Jeffrey Hill.
Elder, a former Fresno deputy district attorney before going into private practice in late 2011, prosecuted these types of crimes for eight years.
Elder said, excluding federal cases of embezzlement, the Tashima case was one of the larger ones he has seen in the Central Valley.
We have had much larger embezzlement cases involving millions of dollars, but those usually go to the federal prosecutors because they have more resources than the DAs office, Elder said. Considering the circumstances, this was not the optimum decision for the victims, but the plea bargain was designed to get the most restitution as possible for the victims, which we did. The DAs office did a good job in getting the criminal to make a significant and immediate partial restitution to the victims.
Elder explained that county jail is a tougher place than state prison to be sentenced to, because unlike state prisons, county jails were not designed to handle long term incarceration.
Like Mr. Fruehe, I hope this case makes businesses realize what can happen to them if they are not cautious. Where people make a mistake in business is because they can only afford one bookkeeper, they often have just one person, usually a very trusted person, doing their bookkeeping ... handling both the accounts payable and the accounts receivable, Elder said. Often times there is no cross-checking.
Elder said what usually happens in embezzlement cases is the person starts by taking a small amount of money and when no one notices, they take a little more and a little more, and if no one ever discovers what is going on, the amount of money taken will just keep escalating.