Although Patricia K. Smith, t won’t be sentenced until Wednesday, the prosecution recommends she serve five to six years in prison.
The former controller of the Pine Township-based car dealership, Smith, 58, pleaded guilty in January to one count of wire fraud before Senior United States District Judge Gustave Diamond.
According to documents filed in federal court in Pittsburgh, Smith, a married mother to three grown children and grandmother to three, electronically transferred funds from Baierl’s payroll bank account to one of her personal bank accounts on more than 800 occasions from Dec. 2004 until July 28, 2011.
To cover her crime, she altered the bank statements, prosecutors said in court documents.
In a court memorandum filed Saturday, U.S. Attorney Steve Kaufman wrote Smith used the money for expensive trips around the world, luxury gifts for friends, houses for herself and family members and jewelry.
She also purchased various “experiences,” including a tour of the Vatican, an on-stage escort at the Phantom of the Opera, lunch for six prepared by the Barefoot Contessa at her residence in East Hampton, New York, a trip to the Super Bowl—where she and friends occupied a hospitality suite—and dinner with actor Kevin Spacey.
“A large portion of the money also was wasted on gambling activity, both by herself and by at least one family member,” Kaufman wrote.
At the time of her resignation from Baierl last July, Smith earned about $53,000 per year, according to Kaufman.
“A fraud scheme involving such an amount is quite rare in our District—the amount stolen places this case among the most egregious white collar crimes prosecuted in the Western District of Pennsylvania in recent memory,” Kaufman wrote.
The U.S. Attorney wrote Smith confessed to authorities last July after receiving an email from a superior questioning certain accounting activity.
“The email put her on notice that she was in danger of being caught, and the email surely played a role in her decision to seek counsel and reveal the criminal activity to law enforcement,” Kaufman wrote.
Kaufman said the government is expected to recover about $1 million for Baierl.
“The $10 million stolen is not an insignificant amount to Baierl, as it might be for a Fortune 500 corporation,” Kaufman wrote. “The defendant’s pattern of theft negatively impacted the finances of Baierl Acura each and every year from 2005 through much of 2011. Fortunately, her activity did not affect Baierl’s timely payment of its payroll, tax and business obligation and liabilities.”
Under federal sentencing guidelines, Kaufman recommended Smith serve 63 to 78 months in prison.
However, in papers filed by Smith’s defense attorney, Tina Miller, of Farrell & Reisinger in Pittsburgh, argued Smith should served a lesser sentence of 41 to 51 months in prison because of her cooperation with the prosecution.
“In addition to coming forward on her own volition to self-report her crime before her employer knew about her embezzlement, Patricia Smith has forfeited nearly everything she owned, including her home, cash, jewelry, cars, stock and furniture,” Miller wrote in the April 27 court filing. “She has also cooperated fully with the government and asked her family members to cooperate so the government could recover houses, cars and other gifts she gave to them.”
According to court documents, Smith forfeited four residences. One was her home on Marshall Road in Cranberry, the other three properties were home to two of her sons and a nephew, Miller wrote. Smith also turned over 10 vehicles—including three Acuras, four Hondas and a Mustang convertible—stocks, jewelry, cash, gold coins and numerous items of personal property.
Miller wrote Smith “has spent the last nine months of her life repenting, accepting responsibility and doing everything she possibly can to pay back what she stole from her former employer.”
Although to outsiders, Smith had a seemingly wonderful life, she “suffered from depression and from an abusive childhood, which resulted in compulsive behavior, including excessive spending, shopping and gambling,” Miller wrote.
“To compensate for her depression, she lavished gifts and trips on family and friends, all while deceiving them about the cost of the gifts and the source of the funds used to pay for them,” Miller wrote.
Smith is scheduled to be sentenced at 10 a.m. Wednesday. Check back with Patch for updates.