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Ventura PD arrest pair after brief chase for stolen vehicle, ammo, explosives and forged checks

On Tuesday morning, May 12th at 6:51am, the Ventura Police Command Center received a call reference a suspicious occupied vehicle parked on Thille Street, East of Holmes Ave. Officers arrived on scene and contacted the two occupants of the vehicle. While speaking with the occupants of the vehicle, the driver, 23 year old Kelly Smith, accelerated, nearly striking one of the officers on scene. Kelly continued in a northwest direction driving over the center median, striking a parked vehicle and Edison light pole, where the vehicle came to rest. Kelly was taken into custody at the scene along with the passenger, 26 year old Michael Leake.  Both are Ventura residents.

Further investigation revealed the vehicle in question was a stolen vehicle that had been outfitted with an unreported stolen license plate. A search of the vehicle revealed several guns, several thousand rounds of ammunition, explosives, drugs, drug paraphernalia and forged checks.

The Ventura Police department Streets Crime Unit and Ventura county bomb squad responded to assist in the investigation. The subjects in question were later booked at VCJ on numerous felony charges. No officers where injured during this incident.

Ventura Police Department

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Ronald Schaeffer of Faribault, Minnesota has been charged with bank fraud for allegedly writing 127 false checks to himself.

According to court documents, Schaeffer, 39, was hired by Environmental Tillage Systems Inc. (ETS), as its sole in-house accountant. His responsibility was to use QuickBooks accounting software to record information regarding payments owed by ETS to vendors and employees.

Schaeffer purportedly created false entries in ETS’s QuickBooks accounting records that made it appear as if ETS had written the forged checks to legitimate ETS vendors.

Although Schaeffer had the authority to use a signature stamp to validate the checks for a period of time, he was required to obtain the signature of ETS’s CEO or CFO on all ETS checks before releasing the checks to payees.

In a bold move, Schaeffer began forging the required signatures on those checks he wrote to himself.

Court records show that through this scheme, Schaeffer fraudulently obtained a total of $432,504.10 from ETS. Schaeffer purportedly used this money to build a lake house in Elysian, Minnesota, and to make payments on home equity or auto loans.

I recently had the unfortunate experience of advising a small business client whose employee had been forging checks for a number of months for a total dollar amount in excess of $100,000.  Below are some lessons learned from the experience:

1. Check your bank statements promptly and regularly.  A bank may be required to reimburse a business for amounts lost due to a forged check--but only within certain limitations.  In New York, a bank will only be obligated for such reimbursement if the account owner notified the bank of the forgery within 30 days following the mailing of the first statement reflecting the forgery.  The 30-day period can be shortened, depending on your bank's agreement and jurisdiction.  

If there was a string of forgeries by the same person, for purposes of determining whether a bank is required to reimburse, it will look to the date of the first forgery.  Therefore, in the current scenario where the string of forgeries was initiated more than twelve months ago, the bank was under no obligation to make my client whole.

An account owner has an affirmative duty to exercise ordinary care in managing the account, a duty that includes regularly and promptly reviewing bank statements.  An account owner neglecting this duty cannot after the passing of time claim reimbursement benefits.  

2. Perform a background check.  While somewhat distasteful, this could be an effective preventive measure.  Additionally, in at least one situation, a bank refused to reimburse an account owner who had not performed a background check on an employee who forged checks.  In that scenario, the forger had prior convictions for exactly this type of embezzlement.  Under the bank's theory, the account owner did not exercise ordinary care, and therefore denied the claim.  

In the current situation, the employee had been arrested in a similar scam.    

3. Review your insurance policy.  Many business insurance policies include coverage for forged checks.  Thankfully, my client's policy contained such coverage.  The policy covered a significant portion of the loss, but, unfortunately, it was nowhere near the full amount.