A former executive at Latex International in Shelton was sentenced to four years in federal prison Thursday for embezzling nearly $2 million from the company.
U.S. District Judge Stefan Underhill sentenced Joanne Osmolik, 52, of Newtown, the company’s former vice president for human resources, to 48 months behind bars, and also ordered her to pay nearly $2 million in restitution after a sentencing that lasted about 45 minutes in federal court in Bridgeport.
Federal marshals took Osmolik into custody immediately after the hearing. Judge Underhill said he’d recommend she serve her sentence at the Federal Correctional Institution in Danbury, which houses low and minimum security female offenders.
Background
Osmolik pleaded guilty in December to a single count of wire fraud in the case.
Prosecutors said Osmolik, between October 2008 and December 2010, used company credit cards and expense accounts to pay for $1,777,791 worth of personal expenses.
They included three homes in Vermont, six motorcycles, a snowmobile, an all-terrain vehicle, trailers, jewelry, furniture and numerous appliances.
Osmolik and the company’s former CEO, Kevin Coleman, were both involved in the embezzlement scheme, according to prosecutors. The two stole about $3.5 million in company funds through the scheme.
Coleman pleaded guilty in February to one count of wire fraud and one count of tax evasion and will be sentenced May 30.
‘This Woman Needs Help’
In court Thursday, Osmolik’s lawyer, Frank Riccio, characterized his client as someone “who can very easily be controlled by others” and said Coleman led the embezzlement scam.
“Mr. Coleman … was the ringleader. He was the driver of the bus,” Riccio said, later adding: “She made the choices that she made … in part because Mr. Coleman told her to do so.”
“No matter what happens today, this woman needs help,” Riccio said, noting it was difficult to prepare for Thursday’s proceedings because he lost touch with Osmolik for nearly two months before she contacted his office only yesterday.
Riccio asked Judge Underhill to sentence Osmolik to a prison term at the low end of the scale recommended by federal sentencing guidelines in the case — 33 to 41 months — or even less, saying the ends of justice would be served if she was imprisoned for a single day.
Osmolik, who cried and sniffled throughout Thursday’s proceedings, told the judge she has struggled every single day thinking about all the people she hurt.
She said she lost touch with her lawyer because she was overwhelmed by having hurt so many people who she had come to know while working at the company. “I couldn’t deal with it anymore.”
“I am truly sorry,” she said. “None of this should have happened.”
“I’ve hurt so many people, and I don’t want to hurt anybody,” she added. “I just want to make it all right.”
‘She Also Needs Punishment’
“Ms. Osmolik does need help and assistance, but she also needs punishment,” Assistant U.S. Attorney Eric Glover then countered. “This is an egregious crime.”
Glover added that the sentence Riccio recommended “would send the entirely wrong message with respect to a crime like this.”
“General deterrence is critical in a crime like this,” he went on, noting that people should understand that “if you do what Ms. Osmolik has done, you will go to prison for several years.”
Glover added that the likelihood of the company ever getting back all the money Osmolik stole is “slim,” and asked Judge Underhill to give her a lengthy prison term.
Earlier, the company’s current CEO, David Fisher, addressed Judge Underhill and said the embezzlement of Osmolik and Coleman nearly bankrupted the company, which had to spend “months and months and months” and “thousands and thousands” of dollars just to determine how much money the pair stole.
“We have just about kept on track to stay in business, but only just,” Fisher said. “We had customers walk away because they thought the company would be filing for bankruptcy.”
The Sentence
Judge Underhill said Osmolik perpetrated a “terrible, terrible” crime, one that federal sentencing guidelines don’t deal with well because they quantify sentence recommendations based purely on dollar amounts.
“I don’t think dollars are fungible,” he said. “A dollar stolen from Warren Buffett is not the same as a dollar stolen from someone working $9 an hour.”
The judge noted that people have lost jobs as a result of the embezzlement. “They’re trying to put food on the table. They’re trying to pay their rent, and they don’t have a job anymore,” he said, calling the damage done “irreparable.”
“There does need to be a significant prison term in order to deter you and other people,” he said.
“The message has to be that a serious crime results in serious punishment, and I think this crime calls for very serious punishment,” Judge Underhill added, noting that it seemed to him that Osmolik stole money “quite simply out of greed.”
“It looks simply like you wanted to live a lifestyle you couldn’t otherwise afford,” he said before imposing the 48-month term.
In addition to her prison sentence, Judge Underhill ordered Osmolik to pay restitution of $1,777,791 and an additional $450,000, jointly and severally with Coleman, to compensate Latex International for legal fees and other costs it incurred as a result of the embezzlement.
As part of case, she has agreed to forfeit her interest in three residential properties in Vermont, six motorcycles, an all-terrain vehicle, four snowmobiles, vehicle trailers, jewelry and numerous appliances and other home furnishing items.
Reaction
Outside the courtroom, Fisher said he was “somewhat satisfied” with the four-year prison term.
He said that 43 people in Connecticut lost their jobs as a result of the scheme cooked up Osmolik and Coleman.
In addition, he said, one of the company’s plants in the United Kingdom — in Harrowgate, Yorkshire — had to be shuttered, with 15 people losing jobs.
About a dozen current employees of the company sat behind Fisher in court Thursday.
“These people were worried about losing their houses,” he said, adding that he doubts Osmolik and Coleman will be able reimburse the money they embezzled.
“The money’s never going to be paid back,” Fisher said.
