Fired Baird workers charged with fraud
Pair agree to plead guilty
Five years after they were caught embezzling more than $1 million from the firm, a pair of former payroll administrators at R.W. Baird & Co. have been charged.
Their story first made news two years ago, when the Journal Sentinel reported that despite the size and ongoing nature of the offense, Baird had not referred the matter to law enforcement. The fired workers instead had quietly been sanctioned only by the Financial Industry Regulatory Authority, or FINRA. They were barred for life from working in the securities industry, but only those who checked monthly FINRA reports would know that.
But now Rochelle M. Matthews and Linda P. Whitmore have each agreed to plead guilty to separate counts of wire fraud in a two-count complaint filed by federal prosecutors last week. They agreed to pay $1,119,484.49 in restitution.
Wire fraud carries a maximum penalty of 20 years in prison and a fine of up to $250,000. But as part of the plea deals, prosecutors will recommend sentences at the low end of the guideline ranges to be calculated by the judge.
Gamed system
According to FINRA and federal court records:
Matthews, the financial system manager, and Whitmore, a payroll associate, manipulated Baird’s payroll system to falsely inflate their own tax withholding and charitable contribution balances, then issued themselves refunds to which they weren’t entitled.
Baird’s system prevents someone from changing their own withholdings, so Matthews and Whitmore would do each other’s at first, before just trading user IDs and passwords so they could sign in and adjust their own payroll records.
They used the scheme regularly over about eight years, from early 2005 to October 2012, when they were discovered and fired.
The 2014 FINRA action estimated Matthews stole about $800,000 in total, Whitmore about $500,000. In the federal complaint, the amount is a total “in excess of $1.1 million.” The women’s plea agreement put Matthews’ take at about $679,000 and about $440,400 for Whitmore.
Whitmore is scheduled to enter her plea March 22. Matthews’ date has not been set.
In early 2015, a Baird spokesman didn’t say why the firm did not report the crime to law enforcement. In a statement, the company said it did report to FINRA and assisted in its investigation, and that it was an internal matter that did not affect clients.
Matthews’ LinkedIn page indicated in 2015 that she went on to work in payroll at Quad/ Graphics from April 2013 to April 2014 — shortly before her case was posted on a FINRA website.
Claire Ho, director of corporate communications for Quad/Graphics, said in 2015 the company was not aware of why Matthews left Baird, “despite having completed hiring due diligence through a third-party provider.”
An assistant federal prosecutor in Milwaukee said in 2015 there is no policy or agreement with FINRA that would prevent criminal charges in a case like that of the Baird payroll workers.
“A victim may or may not want things to be handled quietly, but that in no way binds law enforcement,” Rick Frohling said, cautioning that he was speaking only generally and not indicating that his office was or wasn’t investigating Matthews and Whitmore.