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CFO gets prison time for embezzling from Cable resort

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Superior Telegram

Lakewoods Resort’s former chief financial officer will spend 37 months in federal prison after embezzling more than $700,000 from her employer.

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U.S. District Judge Barbara B. Crabb sentenced Lori Hall, 50, of Glidden, Wis., for mail fraud and filing a false income tax return Wednesday.

Hall pleaded guilty to the charges Jan. 29.

In September, a federal grand jury seated in Madison returned a seven-count indictment against Hall, her with one count each of mail fraud and wire fraud, and five counts of filing false income tax returns.

At the January plea hearing, Hall admitted she devised and participated in a scheme to defraud her employer, The Lakewoods Inc., which operated Lakewoods Resort in Cable and operated as a management company for Lakewoods Villages Homeowners Association and Forest Ridges Homeowners Association. The homeowners associations were created for two condominium developments on the grounds of Lakewoods Resort. In addition, PNE Investment Company was a holding company created by the three corporate managers of The Lakewoods Inc., to operate and manage cabin rentals on the Lakewoods resort complex.

Hall admitted she embezzled funds from January 2006 through January 2012, from the homeowners associations and PNE bank accounts. Hall admitted that she presented checks for signature with incorrect invoices, altered the payee line on checks after they were signed, and procured an unauthorized signature stamp in the name of one of the corporate managers and used it to sign checks she prepared payable to herself.

Hall admitted using the embezzled funds for personal purposes, which included funding gambling activity. She also admitted the IRS found that from 2006 to 2012, Hall embezzled almost $702,131 from the three accounts.

Hall also admitted she filed a false 2007 federal income tax return with the IRS. The return reported adjusted gross income of $57,322. Hall admitted she failed to report about $169,456 in embezzled income on her tax return, which led to an additional tax due of $38,927.

At Wednesday’s sentencing, Hall argued she should receive a light sentence because she suffered from mental illness due to childhood abuse, addiction to gambling and dissociative identity disorder.

Crabb rejected this argument, finding Hall’s mental illness claim questionable. The judge told Hall that she thought Hall was a consummate actor who was playing the role of trusted friend and loyal employee when in reality Hall was stealing her employers blind.

“That is not mental illness,” Crabb said “That is deliberate, careful and intentional planning. It took enormous thought and memory to do the scheme and cover it up to make sure you did not get caught by your employers.”

The charges against Hall are the result of an investigation by IRS Criminal Investigation; the Wisconsin Department of Justice, Division of Criminal Investigation; and the Bayfield County Sheriff’s Department. Assistant U.S. Attorney Daniel J. Graber handled the prosecution of the case.

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