(KMSP) - A company president from the Twin Cities gave a rare television interview about how his business fell victim to an embezzler, and shared the videotaped confrontation he conducted with the thief. With the camera rolling, John Tschohl of Service Quality Institute sat down his bookkeeper and asked, "So how long have you been doing this?"
Tschohl: "Here's the list of all the checks that we've got so far of money that's stolen. That's a half million dollars right there."
Laura Scholz tried playing it cool. But anyone watching the video could tell by her shallow breathing her heart was probably doing somersaults.
Tschohl: "You gonna talk?"
Tschohl: "So you just stole a half million dollars. You f***ed me over."
Scholz: "I did not."
Tschohl: "Screwed everybody here at the company, screwed our vendors."
She was so trusted at the company she had full access to all the bank accounts.
"I almost had a heart attack, it was just like, I can't believe anybody would do that," said Tschohl.
He isn't the first business owner to discover an embezzler on staff, but it's rare to have the CEO of a company go public and talk about it so bluntly.
"I'm willing to go public," Tschohl said. "I'm willing to look like an idiot. It's pretty bad."
The violation of trust and the loss of all that money was bad enough, but Tschohl is also furious with Minnesota's Department of Corrections.
"I just think the system is cooked in favor of criminals in this state," he said. "Particularly white-collar crime."
The evidence against Scholz was overwhelming. Bloomington Police Detective Cory Cardenas followed the money and surveillance videos.
"What stood out for me was just how much money was taken in such a short period of time," he said.
Scholz was writing checks from one bank account, then going to the company's other bank and cashing them. She would go multiple times a week to get cash, to the same bank and it continued for more than 2 years. Officer Cardenas figured Scholz embezzled at least $330,000. She refused to tell the detective, or her boss, where the cash went.
Tschohl: "Where's the cash, is it in your house?
Tschohl: "What'd you buy with it?"
Tschohl: "Well that's hundreds of thousands of dollars of cash to buy nothing with it. What are you using the money for?"
Tschohl: "I have nothing to say John."
The police investigation revealed she gambled away much of it at Mystic Lake Casino. Last summer, Scholz was tried and convicted of felony theft by swindle. The judge gave her a stiffer than usual sentence -- 6 years in prison -- but the former bookkeeper has spent less than a year at the women's prison in Shakopee, Minnesota. She's already getting out.
"I have no idea why the correctional system can just say the heck with the judge, the heck with the court system, we're just going to eliminate most of the penalties and you can get off scot-free," said Tschohl.
Hennepin County Attorney Mike Freeman said he is also disappointed that Scholz had to serve only 11 months of a six year sentence.
"We can't do anything about it, and if I wrote a letter to the Department of Corrections or called them or complained about it, they would say thank you Mr. County Attorney and click," said Freeman. "I'd like her to do half (of her sentence)".
How can the DOC just wipe away part of an offender's prison time?
In this case, Scholz applied to a kind of boot camp program that if completed successfully allows offenders to be on supervised release for the remainder of their sentence.
The Department of Corrections declined an on camera interview, but in a prepared statement, said Scholz was taking part in a program allowed by state law that "is shown to significantly reduce recidivism."
That same program is supposed to hold the offender accountable and change their criminal way of thinking. But according to Tschohl, he has yet to receive so much as an apology from Scholz. He said she is sending him $30 a month restitution checks. At that rate it'll take hundreds of years to pay back the $330,000 she took.
Scholz declined to speak with Fox 9 News.
"For embezzlement there is no safer crime in Minnesota, no safer crime. This is the most lucrative crime that there is because there are no real serious penalties," said Tschohl.
The Fox 9 Investigators checked some recent embezzlement cases and found penalties all over the board. Dawn Shores swiped $230,000 from her employer, got a 4 year prison sentence but was put on supervised release after 13 months. Ava Hamilton embezzled $540,000 from a restaurant and spent 42 months in prison. Kimberly Kolhepp took a million dollars, was sentenced to more than 4 years in prison but is expected out after 32 months.
"I understand you have a previous arrest record for embezzlement, I found that out today, so this is a pattern," Tschohl said to Scholz as he was confronting her.
Tschohl admits he did a lousy job of digging into his bookkeeper's criminal history before hiring her. She went on a spending spree with a previous employer's credit card.
"I teach service recovery. When you make a mistake, admit it, talk about it, so I have to practice what I teach," he said.
Tschohl has a lesson for anyone who owns a business: make sure you run a thorough criminal background check on every new hire and buy embezzlement insurance. Tschohl admits he would've saved himself a lot of grief had he done both.