Former Milton woman gets 2 years in prison for embezzlement

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By Kevin Murphy
Special to The Gazette
Tuesday, November 26, 2013

MADISON--A former Milton woman who embezzled $1.57 million from her Janesville employer while starting a scrapbooking business was sentenced Tuesday in federal court to two years in prison and ordered to make restitution.

Brenda L. Werfal, 55, now of Middleton was hired as the office manager of Southern Wisconsin Emergency Associates, 1446 N. Randall Ave., in 1988. Specialty Bill Services, which has common ownership with SWEA and processes SWEA's payroll, hired Werfal in 1993.

As SBS's office manager, Werfal collected money from SWEA's third-party insurers for services performed by SWEA's 30 physicians and physician assistants. Werfal forged more than 1,000 checks in 2011 and 2012 and deposited the money in her accounts, District Judge Barbara Crabb said.

Werfal fit the pattern of other women Crabb said she has sentenced for embezzlement -- “hard workers, responsible, trusted implicitly, which gives them exactly what they need to set up this scheme.”

 Crabb also chided Werfal's bosses at SWEA, saying: “Routine audits…and a little more vigilant attention,” even requiring Werfal to take two-week vacations, could have brought “this problem to light.”

Werfal supervised seven employees but had little supervision over her activities, Crabb said.

Werfal pleaded guilty to check forgery in September.  At that time, she told Crabb that without authorization she used a signature stamp of a company official on SWEA checks to pay her own bills.

Werfal then manipulated SWEA's financial records to conceal her embezzlement, Crabb said.

Due to the amount of loss and abuse of her position of trust, advisory federal guidelines put Werfal's sentence at 37-46 months. Her attorney, Jack Hoag, argued that it was Werfal's first offense, albeit a big one. Hoag said a probation-only sentence would allow Werfal to continue working her three jobs and making restitution.

Hoag noted that Werfal has forfeited her retirement accounts and company stock options and also lost “her house, her husband and has filed bankruptcy.”

Werfal owned Scrap Book and Stamping Memories stores at 2604 E. Highway 14 in Janesville and on Thierer Road in Madison before closing them in February 2011, according to her Facebook page.

Manta, a business information website, indicated Werfal's scrapbooking stores had estimated annual revenue of $1 million to $2.5 million.

Werfal apologized “for the crime I committed” and asked Crabb for a chance to keep working in order to correct her wrongdoing.

Crabb denied the request, saying the amount that Werfal could reasonably repay while on supervised release amounted to only 7 percent of what she owed.

Because it was Werfal's first offense, however, and because she cooperated with authorities and has repaid about $400,000 to date, Crabb said she would issue a sentence below the advisory guidelines.

Werfal is to report to prison Jan. 14.

Crabb ordered Werfal to pay restitution of $474,284 to SWEA, $650,000 to Barclay Bank, which Crabb said was negligent in handling SWEA's accounts, and $25,000 to the Cincinnati Insurance Co.

Monthly payments of a minimum of $600 are to begin 90 days after her release from prison, Crabb said.

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