Bank embezzler gets 4 months, must pay $759,000
A Kalispell woman was sentenced Friday to 40 months in jail and ordered to pay back $759,000 she embezzled from First Interstate Bank over a period of seven years.
Cheryl Serfoss was 42 when she pleaded guilty in January in federal court to stealing deposit money from 1994 until 2001 or 2002.
U.S. District Judge Donald Molloy sentenced her Friday on the low end of the federal guidelines, which suggested a sentence of between 37 and 49 months. She will be on supervised probation for five years after her release.
She could have received up to 30 years in prison.
U.S. Attorney Bill Mercer said the sentence "will hopefully deter [embezzlers] and promote respect for the law.
"People believe economic crime is not going to result in incarceration. This case disproves that theory."
The sentence was "not quite as harsh as I think it could be," Mercer said. In spite of the substantial amount of money involved, Serfoss' lack of a criminal record and the fact that there was only one victim to her crime suggested a shorter penalty.
Serfoss' attorney, David Stufft of Kalispell, said he thought the sentence is fair.
Serfoss also will pay about $200 per month restitution when she is released from prison. At that rate, it would take 316 years to repay the $759,000.
Serfoss was the vault teller
at the bank drive-through near Tidyman's. She stole deposit money and falsified records to cover up for the thefts.
She admitted in court that her thefts caught up to her when the unsophisticated system she used to cover them began to fail. She was investigated by the FBI and the IRS.
At sentencing, she apologized to the people who trusted her.
Molloy asked where the money went.
"She gave it to people who were down and out on their luck," Stufft said.
Serfoss was responsible for conducting cash counts and reconciliations at the bank. The bank maintained a holding account, used when tellers provide money to the banks' vaults or when money is transferred between vaults within the First Interstate Bank system.
Two journal entries record the cash transfers. One shows a debit from the teller's balance. The other shows a credit to the vault's balance.
The journal entries are supposed to be run though the bank's proof department and are posted to the book's banks, usually on the same business day.
When Serfoss received money from a teller, she would keep some of it. Then she'd run the first record of the teller's portion through the proof and save the record of the vault's portion until she received enough money from later deposits to cover the vault's shortfall.
She also made false entries in the bank's books, creating the illusion that money was being transferred from the drive-up branch to the main vault, reducing the book balance of cash at the drive-up branch to hide the missing money.
Serfoss began falling behind in her false entries in the bank's books when large cash depositors began making their deposits at the main branch rather than at the drive-up. Without that infusion of cash, the balance in the holding account started taking more than a day to clear and deposits to the main branch were delayed.
In June 2002, a bank review of the drive-up branch's transactions revealed they were taking too long to clear. With more large depositors taking their cash to the main branch, the drive-up's holding account was still curiously high.
In August 2002, the bank conducted a cash count at the branch. It revealed that some of the account tickets had never been run through the proof and that several hundred thousand dollars' worth of teller tickets were not accounted for.
Serfoss was prosecuted by Assistant U.S. Attorney Kris McClean.
Reporter Chery Sabol may be reached at 758-4441 or by e-mail at csabol@dailyinterlake.com