Goodwill embezzlement whistleblower soon to have trial
Patty
One of the key characters in the embezzlement scheme, Linda Faye Marcil,
was the first or second wife of Jerry ?, a nightclub owner whose murder was
chronicled by Ann Rules in the book "In the Name of Love."
http://www.mercurycenter.com/premium/local/docs/goodwill07.htm
Goodwill figure's trial due
Blew whistle: Jeff Marcil exposed a $26 million embezzlement scheme.
By Ed Pope Mercury News Staff Writer
Jeff Marcil, the man who blew the whistle on a decades-long scheme that
embezzled an estimated $26 million from Goodwill Industries of Santa Clara
County, will be tried on charges of grand theft involving a sum of more than
$100,000.
After a two-hour preliminary hearing Friday, Superior Court Judge Andrea
Bryan Lynn found sufficient evidence to bind him over for trial in the
largest embezzlement case in Santa Clara County history. Marcil did not
testify at the hearing.
The district attorney asked the court to dismiss two other charges against
Marcil: a count of conspiracy and an enhancement charge that could have
increased any sentence.
Marcil, 47, who has moved from California, revealed the existence of the
sophisticated theft operation and his role in it to the FBI in September
1997 and subsequently to the Santa Clara County District Attorney's Office.
The operation was so sophisticated that at its height, it employed a virtual
company within Goodwill -- 100 people the non-profit charity did not know
were working at the stores -- and paid them a total of $40,000 in cash every
week.
Six members of Marcil's family -- including his estranged wife, Bonnie,
three sisters, a brother and a nephew -- were arrested and pleaded guilty to
a variety of charges, including grand theft and conspiracy. All but the
nephew, who was placed on probation for a minor role in the scheme, were
sentenced to prison terms ranging from 16 months to four years.
Among those convicted was Linda Faye Marcil, Bonnie's sister, who is married
to Jeff Marcil's brother. She was largely responsible for making the scheme
work and for paying everyone involved. As manager of Goodwill's Willow Glen
store and the purported ringleader, she received the stiffest sentence.
Others included her sisters, Ellen Salas and Dale Rice; a brother, Clifford
Miller Jr.; and Bonnie Marcil's son by a previous marriage, Michael
Mitchell. All pleaded guilty or no contest and cooperated in the
investigation.
An alleged key member of the conspiracy, former director of stores Carol
Marrs, committed suicide shortly after her home was searched and she was
questioned about the operation.
Investigation continues into the alleged roles of former Goodwill President
Andrew Liersch and former Executive Vice President Robert Sasson. Neither
has been charged with wrongdoing, although court documents have suggested
both were participants.
Authorities charged that those involved illegally sold donated goods to
independent dealers out of the back doors of Goodwill's 10 stores --
primarily the Willow Glen facility -- and skimmed cash from cash registers
specifically set up for that purpose.
At Friday's hearing, Deputy District Attorney Stephen Lowney called only one
witness, Mark Hatcher, an investigator for his office. Hatcher said Jeff
Marcil admitted he had suggested to Linda Faye that they use an old company
of his to ``launder'' the stolen money so family members and other
participants would have a legitimate way to declare taxes on their
illegitimate earnings.
Hatcher testified Friday that Bonnie Marcil brought home an average of
$2,500 a week in cash from the theft scheme. Earlier testimony indicated
other family members received similar amounts.
Hatcher testified that Jeff Marcil's motivation for alerting authorities to
the thefts -- which had gone on for at least two decades -- was ``his
concern for his (9-year-old) daughter because he had seen the (embezzled)
money used to manipulate younger members of the family and because of his
concern about (her) growing up in that environment.''
Marcil's attorney, Tom Orvis, argued that Hatcher and Lowney had failed to
show that Marcil stole money, that any money he received was Goodwill's
money or that the business he allegedly used to ``launder'' the funds was
not a legitimate business.
----------------------------------------------------------------------------
----
Patty
in the SF papers. It was front page news in Silicon Valley when it first
hit. The amount embezzeled was initially thought to be much smaller but as
they investigated it became larger as the length of time the fraud took
place over grew wider. For awhile, donations to Goodwill were down in Santa
Clara County. I am not sure how they have recovered from the scandal.
Excerpt from the SF Chronicle Oct 31, 1997
According to court documents, the scam may have included as many as seven of
the ten Goodwill stores in Santa Clara County and involved the recovery of
$350,000 found in a home safe.
However, the true dimensions of the alleged eight-year scam may never be
known, officials said, because most of the thefts were of hard-to-trace cash
and donated goods.
To recoup at least some the losses, charity President Hugh Barnett said the
nonprofit organization has filed a $1.2 million lawsuit to hopefully recover
cash and goods allegedly stolen by two former employees who are believed to
be the ringleaders.
Meanwhile, five Goodwill store managers -- four of them sisters -- have been
fired or have resigned in the wake of a criminal investigation by the
district attorney's office.
Another former employee, Carol Marrs, the general manager of store
operations, apparently committed suicide three days after law enforcement
officials searched her home.
According to the lawsuit filed in Santa Clara County Superior Court, Marrs
and Linda Faye Marcil, manager of Goodwill's Willow Glen store in San Jose,
were the masterminds of the scheme. They apparently told managers of other
stores to report only a portion of their daily sales to Goodwill's
accounting office, while the balance was bundled into envelopes and sent to
Marcil on a daily basis.
The managers' compliance was rewarded with weekly cash payments of $650 to
$1,000, according to court documents.
Three of Marcil's sisters -- Bonnie Marcil, Ellen Salas and Dale Rice --
were also Goodwill store managers, along with Linda Cervantez. All have
resigned or have been fired for violating company policies, according to
Barnett.
The alleged scheme came to light when Bonnie Marcil's husband, embroiled in
a bitter divorce and custody dispute, approached police officials with
information, Barnett said.
Agents who searched Linda Marcil's home last month found two safes, one
hidden under a hatch in a bedroom closet, containing about $350,000 in cash,
according to court documents. Some of the cash was bundled with Goodwill
register receipts. Records found in the search revealed a bank account
containing $33,000. A subsequent search of her office revealed another
$55,000 in cash.
An October 3, search of Marrs' home revealed more than $850,000 in banking
and investment accounts. It also revealed that she had completely paid off
her home and had recently purchased a new car for $25,000 in cash.
The lawsuit also accuses Linda Marcil of using other relatives to steal
goods and launder money. Brother Cliff Miller told an investigator that for
seven years, Linda Marcil had given him goods donated to Goodwill that he in
turn sold for $200 to $500 per week.
A nephew, Michael Mitchell, told investigators that Linda Marcil used his
name to set up a fictitious gardening business and deposited about $16,000
per month into its accounts. Mitchell said he redistributed the money by
issuing phony paychecks to names provided by his aunt.
Barnett said his organization filed the civil lawsuit to prevent the
dispersal of the allegedly stolen assets while the criminal case is being
investigated. He said Goodwill has hired new managers and completely
revamped accounting procedures.
``We have taken steps to assure that what has allegedly happened here cannot
happen again,'' Barnett said. ``We believe this was isolated to a few people
and hope the community will continue to support us in the future.''
Patty
Excerpt from the Monday, July 13, 1998 SF Chronicle:
But from the beginning, investigators have suspected that a plot operating
openly from 10 retail stores countywide must have been noticed by others in
the company. And legal papers filed this spring by Linda Faye Marcil, the
scheme's alleged ringleader, claim that Goodwill executives knew of and
profited from the embezzlement.
According to Marcil, cash skimming at the charity began more than 20 years
ago, eventually pulling in $50,000 to $55,000 per week. She claims that
Andrew Liersch and Robert Sasson, Goodwill's former president and former
vice president, helped set up the plot and profited along with numerous
other employees.
Marcil does not deny her participation in the embezzlement but hopes that
others will be found equally liable and forced to contribute to restitution,
according to her attorney, Kai Wessels. Marcil and her family have been
economically ``wiped out'' by the prosecution, Wessels said.
Liersch and Sasson could not be reached for comment, but have previously
denied Marcil's charges. Prosecutor Lowney declined to say whether
Goodwill's former executives are the focus of the continuing criminal
investigation.
Even if more criminal charges are filed, it is unlikely that the true extent
of the charity's losses will ever be known.
According to Lowney, the first bit of Goodwill cash may have been handed
under the table in 1976, when $50 was slipped to one of the defendants after
working at a Goodwill weekend yard sale. The yard sales were banished after
Liersch took over the nonprofit in 1978 and began creating a more
sophisticated look for Goodwill's retail operation.
``The profits grew along with the (Silicon) Valley,'' Lowney said, noting
that the area's enormous economic growth has generated a virtually endless
supply of valuable -- and untraceable -- secondhand goods.
The huge amounts of cash generated by the charity's stores were enough to
support very respectable growth in the business as well as an enormous
embezzlement plot, officials say. Goodwill made good profits and opened new
stores even while the plot was in full swing.
