Brawley man sentenced for embezzling from farm
SAN DIEGO — Former bookkeeper and Claude Theodore Riley, of Brawley, was sentenced in federal court here today to 24 months in prison for embezzling from his former employer and failing to pay taxes on the stolen funds.
He was also ordered to pay $273,000 in restitution to the employer Lance Reeves Farms and $75,000 to the Internal Revenue Service according to a press release form the US Attorney’s Southern District Office in San Diego.
Riley pleaded guilty in September to wire fraud and making a false tax return in a five-year scheme in which he stole from his employer, an Imperial Valley farm.
Riley stole approximately $272,984.00 from his employer, filed fraudulent tax returns, and failed to file required employment tax returns resulting in a $1.5-million-dollar tax lien against the farm.
Riley served as Reeves Farms bookkeeper from 2010 to 2015, overseeing the farm’s entire annual budget. As the bookkeeper, Riley had access to the farm’s bank accounts, paychecks, and bookkeeping records. Riley forged certain IRS documents to hide his embezzlement from the employer.
For his scheme, Riley made 148 transactions out of the employer’s bank account, fictitiously entered various vendors to be paid into the bookkeeping records, and generated checks made payable to himself stated the press release.
“His employer trusted Riley to safeguard the fruits of their labor, but he diverted hundreds of thousands of those hardearned dollars into his own pocket,” said U.S. Attorney Adam Braverman. “Today, the defendant pays the price for his deception.”
“Mr. Riley took advantage of the trust of his employer for his own benefit,” said FBI Special Agent in Charge Eric S. Birnbaum. “Today, justice is served for this Imperial Valley farm family. This case is an excellent example to illustrate how the FBI works to uncover fraud schemes that have a significant impact on the Valley’s hard-working farming industry.”
Previous Imperial Valley Press reports stated Riley is best known as “Ted” and is one of the faces behind The Rock Coffee Shop and Café in downtown Brawley.
Riley’s embezzlement prompted Reeves Farms to file a tort claim on June 18, 2015, against the city alleging the farm’s unidentified “office manager” had used an $85,000 check drawn from the farm’s account to retire a loan balance that same office manager, and other unnamed individuals, owed the city of Brawley.
The city had originally authorized an $80,000 loan to the parties behind the coffee shop.
The tort claim resulted in a “dispute” between the farm and the city about “which party should bear the loss caused by the fraud,” and ultimately resulted on June 29, 2016 in a $42,800 settlement, according to a copy of the settlement provided by the city.
As is typical of such settlements, it conferred no admission of liability and released the city from any further legal claims from Reeves Farms that may have arisen from its office manager’s (Riley’s) actions.
It also bears mention that the day the tort claim was submitted to the city, Brawley police executed a search warrant at the popular downtown coffee shop, as well as a Jennifer Street residence, in connection to the embezzlement investigation.
The department, through a June 2015 press release, had also mentioned that no arrests were made in connection to the execution of the search warrants.