Embezzlement plagues Merced County growers - The Packer

Embezzlement plagues Merced County growers

08/28/2012 05:40:00 PM
Mike Hornick

Quail H FarmsAn embezzlement case against a former employee of Quail H Farms LLC that ended in a one-year jail sentence is just one of several such prosecutions in Merced County, Calif., involving growers or processors as victims.

Dolores Morales, a longtime sales clerk, was ordered to pay back $110,904 to the Livingston-based sweet potato grower-packer-shipper.

Ralph Cook, Merced County Superior Court commissioner, also handed down a one-year county jail sentence in June plus three years of probation.

“This office has handled dozens of pretty similar cases,” said Matt Serratto, Merced County deputy district attorney. “It sort of fits a pattern. Most of the big money here is in agriculture. You’ve got outfits with a lot of money coming in and a bookkeeper or someone in sales dipping in, and pretty soon it adds up.”

Some recent guilty or no-contest pleas involving larger sums resulted in state prison time.

Last October, former payroll clerk Beverly Roan got a seven-year sentence for embezzling more than $1 million from Le Grand-based J. Marchini Farms, which grows radicchio and other crops.

Roan’s sentence equaled that of Kimberly Sziraki, who in 2010 got seven years for embezzling more than $1.4 million from Merced-based nut processor Central Valley Processing Acquisition Corp.

Restitution was also ordered in all cases.

In July, Debra Tanachion, former bookkeeper at Atwater-based Weimer Farms, was charged by the Merced County Sheriff’s Department with embezzling more than $300,000. That case is still active.

Signs of trouble

Morales worked for Consolidated Farms and Quail H Farms — as the company was renamed in 2005 — for about 20 years and through ownership changes, according to Jack Smith, partner and chief executive officer.

Her employment there ended in February 2011.

Smith, who’s also a certified public accountant, agreed with Serratto that agriculture in the county has proven especially vulnerable to embezzlement.

“In an ideal control environment, people would never be able to have access to both accounts receivable and cash,” he said. “That’s just an accident waiting to happen. It’s just human nature at some point to think that it’s not stealing, that they’re entitled.”

The problem is partly one of scale, he said.

“Companies that have larger margins and higher profitability have the people to man the control structures that allow you to segregate duties better,” Smith said. “But in the agricultural industry we can’t hire enough people to segregate duties sufficiently because we don’t have the margins.”


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