Wednesday, December 21, 2011

Ruth Fallis Back In The News

If I had to chose beween my two favorite Delaware criminals it would be hard to decide if it would be Bill Hitch or Ruth Fallis. Both worked as accountants and were in a position of trust. They cast shame on a profession that already has done enough to be ashamed of, working in the pay of banks and Stock brokerage firms and almost causing the financial system to collapse. I picked this up from the News Journal today

WILMINGTON -- Federal prosecutors will be allowed to sell more than 100 pieces of jewelry belonging to a Hockessin woman who was convicted of embezzling from her employer and was ordered to repay more than $1 million.

According to court papers, Ruth C. Fallis -- who now goes by Ruth McCutchan -- distributed dozens of items of jewelry to family and friends after her 2007 conviction on fraud charges in what appeared to be an attempt to hide them from prosecutors.

Chief District Judge Gregory M. Sleet told the parties Tuesday he will issue an order authorizing the sale of the seized items after prosecutors provide him with an order to sign.

In 2006, prosecutors charged McCutchan stole more than $1 million from the Perry Anthony Salon & Spa during the more than 10 years she worked as a bookkeeper at the business, taking cash receipts for herself and writing checks from salon accounts to pay for lavish family trips and renovations at her home.

After pleading guilty to bank fraud and wire fraud -- two of the 52 criminal counts against her -- McCutchan indicated in 2007 on a court financial statement she had only one item of jewelry, a diamond engagement ring worth an estimated $28,000.
Prosecutors, however, found that McCutchan had distributed more than 100 items of jewelry to family and friends following her conviction, including gold necklaces, pearl necklaces, Cartier and Rolex watches, a platinum diamond necklace, gold rings and bracelets and a pin with the words "Celebrate the gift of Jesus."

At a November hearing, according to a transcript, McCutchan denied she was trying to hide anything or deceive anyone and claimed she essentially forgot about the items because she was "a mess" due to the charges and the failure of her marriage. She said she also thought the jewelry "wouldn't even make a dent in what I owe [former employer] Perry [Scarfo]."

McCutchan claimed the only reason prosecutors knew about the jewelry was because her ex-husband -- former state labor secretary Matthew Fallis -- was angry with her and told prosecutors about the items, something prosecutors denied. McCutchan, without an attorney, contested the sale of the items, claiming some had sentimental value to her and she hoped the sale of some real estate she owned in North Carolina would instead fully compensate the Internal Revenue Service and her former employer, Scarfo.

According to prosecutors, McCutchan covered up her thefts from Scarfo by not making the salon's quarterly tax payments.

When Judge Sleet looked at the list of jewelry items that McCutchan wanted to keep ownership of in November, he said it did not appear any would be exempt from the plea agreement she signed with the government in which she promised to turn over her assets.

"I guess I was just hoping, your honor," McCutchan responded.
Federal prosecutors estimated that several of the items will likely have a value of more than $1,000 but prosecutors did not have an estimate for the total worth of all the items that McCutchan stashed with family and friends.

Sleet initially delayed making a ruling in the case in November, hoping both sides could reach an agreement. However, no agreement was reached, according to Assistant U.S. Attorney Shannon Hanson, leading to Tuesday's ruling.

In November, prosecutors said McCutchan had repaid only about $4,000 of the more than $1 million she owes the Internal Revenue Service and Scarfo.
Hanson said Tuesday that McCutchan has completed the three-year prison sentence that was imposed in 2007.

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