Accountant stole $1 million from SC: Feds
Karen Rhett was an accountant at a South Carolina real estate agency for nearly 25 years, according to federal court documents.
She also misappropriated it, prosecutors said.
A federal judge sentenced the 59-year-old to three years in prison on Monday, April 4, after pleading guilty to felony charges last year. She was also ordered to spend three years on probation and to pay compensation.
Rhett’s defense attorney did not immediately respond to McClatchy News’ April 6 request for comment. But he said in court documents she took full responsibility for the theft after the FBI showed up at her Mount Pleasant home, just outside Charleston, in 2020.
“Painfully and with deep sadness, she admits that she took advantage of her position of trust as an accountant,” said George Rutledge DuRant, who represented Rhett. “She admits that her theft was long and started a long time ago with a relatively small amount of money. It got worse over time. The more she stole, the harder it became to stop.
According to court documents, Rhett worked for Simmons Realty Company, a real estate agency run by David and Elizabeth Simmons.
“It took three long years of tedious investigative work by the family and a forensic accountant (former IRS special agent) to uncover this sophisticated and complex fraud scheme,” Bart Daniel, who represented the Simmons, told McClatchy News in a statement. “The Simmons family is relieved that justice has finally been served.”
Prosecutors said Rhett oversaw the company’s accounting and business records and was “in a position of trust” when she allegedly began siphoning off money.
She is accused of transferring money to herself, often moving the funds between other business entities before they finally land in her account. Rhett also issued commercial invoices for bogus expenses and wrote checks to himself before recording the payments as legitimate, the government said.
The Simmons eventually fired her, and FBI agents visited Rhett at her home in July 2020, according to court documents.
According to his attorney, Rhett confessed to the embezzlement the following month and began cooperating with federal investigators.
“It should be understood that Karen made the decision to confess entirely on her own and quickly, within a week of the FBI knocking on the door of her home,” her lawyer said.
Rhett sold the 4,000 square foot house she shared with her husband and daughter for $982,000 in December 2020, according to real estate listings. Her attorney said she wrote a restitution check totaling $640,633 and submitted it to court in January 2021.
Rhett was charged by criminal intel and pleaded guilty to charges of wire fraud and misrepresentation, according to court documents. Her attorney said she was fired from her new job at a holistic nutrition store when news of the guilty plea broke in April 2021.
Rhett then started a business, Cupcake Bouquets by Karen, through which she bakes and sells “delicious and artistic, mostly floral cupcakes,” her lawyer said.
From August 2021 to February 2022, he said, she sold $3,648 worth of cupcakes.
“Karen is confident that Karen’s Cupcake Bouquets, LLC would provide her with the means by which she can make meaningful payments toward full restitution,” her attorney said in the sentencing papers. “In terms of taking new orders and building this business as it currently stands, Karen has been careful not to take too many new orders or grow too quickly because her imminent future is, at best. , uncertain.”
Rhett’s attorney had asked the judge to sentence her to a period of home confinement, pointing in part to her struggles with depression since the charges came to light and a recent diagnosis of fibromyalgia.
He also said it was important for Rhett to be home with his 21-year-old daughter, who reportedly struggled with mental health after a short career as a singer-songwriter. According to sentencing papers, her daughter once sang at “various East Coast gymnasiums and performance venues with a message against bullying” as a teenager.
Rhett submitted six letters of support written by his therapist and various family members also appealing for leniency.
“Karen suffered the consequences of a self-imposed sentence, shame and guilt in front of her friends, family and the whole community,” her lawyer said. “She endured the loss of virtually all of her possessions and she suffered the continuous agony of the dark depression. She has already been severely punished.
At sentencing, the judge recommended that Rhett serve her prison term at FPC Alderson in West Virginia so she could receive medical treatment. Once released, the judge forbade her any contact with the victims.
The amount of restitution she owes is listed as “to be determined” in the court docket.