Former Jefferson City Bank Officer Sentenced for Stealing $410,000

JEFFERSON CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that a Jefferson City, Mo., woman was sentenced in federal court today for embezzling $410,000 from the bank where she was employed.

Katherine Nicholle Brown, 29, of Jefferson City, was sentenced by U.S. District Judge Brian C. Wimes to 15 months in federal prison without parole. The court also ordered Brown to pay $410,000 in restitution. Brown voluntary surrendered to begin serving her sentence on Oct. 1, 2015, and remains in federal custody.

Brown was previously employed as the head teller at Hawthorn Bank in Jefferson City. On Sept. 15, 2015, Brown pleaded guilty to the misappropriation of funds by a bank officer. Brown admitted that she embezzled $410,000 from December 2012 to Sept. 19, 2014, by taking money from the bank vault for her personal use. According to court documents, Brown used the money she embezzled to buy various vehicles, make home improvements and upgrade her wedding rings.

Brown was employed at Hawthorn Bank from April 9, 2007, through Sept. 30, 2014. Brown became head teller and, on Jan. 26, 2010, she became responsible for managing the vault at the main branch of the bank. She was also responsible for ordering money from the Federal Reserve Bank. Additionally, if any of the bank’s branches in Jefferson City, Columbia or California needed money for their branch, they would contact Brown and she would ship the funds to them. Brown was also responsible for daily and monthly audits of the vault.

Brown admitted that she began taking money from the vault when her husband had shoulder surgery in 2012 and could not work. She took the money in small amounts, and would place it in her pockets. Brown then plugged in certain amounts in the vault book to cause the vault book total to match the vault balance in the bank’s computer accounting system. Brown also admitted that, when the bank underwent an internal audit in December 2012, she made false entries into the computer system to conceal the fact that the vault did not match the computer system.

On Sept. 19, 2014, just prior to taking maternity leave, Brown prepared and shipped five bags of cash of varying denominations to the Federal Reserve Bank. She prepared and labeled the bags, which were bar-coded and tamper proof. She reported that the total amount of cash shipped to the Federal Reserve Board was $844,000; however, when the Federal Reserve Board received and counted the money, they found it to be only $434,000.

The Federal Reserve Board reported the shortage to the bank, which conducted an audit of the vault. The audit revealed that certain entries made in the vault book reflecting cash amounts sent to Columbia, Mo., and California, Mo., bank branches were $200,000 higher than the branches had actually ordered. As a result, the vault did not contain as much cash as had been reported on the bank’s computer accounting system. Auditors concluded that Brown had to report to the Federal Reserve Board that $844,000 had been shipped so that it would balance to the bank’s accounting system.

This case was prosecuted by Assistant U.S. Attorney Jim Lynn. It was investigated by the FBI.