A pooch with cancer started Stephanie Langten Castillo down the path to involvement in the largest embezzlement case ever prosecuted by the Hennepin County attorney’s office, authorities said Thursday.
When approached by police in October, Castillo, vice president of a Golden Valley property management company, confessed to stealing $1.3 million, said County Attorney Mike Freeman. Half of the money fed a shopping addiction and the rest funded her husband’s business in Mexico, he said.
Freeman, who has served as county attorney for a total of 17 years, said Thursday that he was amazed that Castillo could systematically take that much money over five years. Because of the length of time and the dollar amount taken, his office will ask for a sentence significantly longer than that recommended in state guidelines, he said.
Castillo, 42, of Eden Prairie, is charged with eight counts of felony theft by swindle. She turned herself in to police Wednesday and posted $300,000 bail, which her attorney, Paul Dworak, called excessive. Arguing before Judge Gary Larson that Castillo’s travel should not be restricted, Dworak said she has two young children and is six months pregnant.
Castillo declined to comment through her attorney.
The dollar amount in her case tops that in another prominent embezzlement case, that of Joel Pourier, executive director of the Heart of the Earth charter school in Minneapolis, who in 2010 received a 10-year sentence for embezzling more than $1 million.
Castillo is accused of embezzling money from four companies, starting in 2009, while working for Balderson Management. Her biography on the company’s website said that “Stephanie strives for success and client satisfaction, by determining clients’ needs, wants, motivations, and financial goals” and that the company has “state-of-the-art financial management.”
Cynthia Balderson, the company’s president and Castillo’s mother, declined to comment Thursday. Balderson runs the daily operations of commercial properties, and Castillo provided property management and leasing services.
Castillo had access to clients’ funds and drafted fake invoices for vendor services and applied some of the payments to Balderson’s records, the charges say.
The final step was creating hundreds of fraudulent checks and forging her mother’s signature. Castillo made most of the checks payable to herself, but also used her clients’ businesses’ checks to pay personal bills, the charges say.
In October, Richard Martens, co-owner of commercial properties managed by Balderson, discovered the theft after realizing his “business projections were coming up very short.” After auditing his financial records, he noticed that several check amounts didn’t make sense. He then concluded that check signatures were forged and notified police.
Castillo told investigators she was unaware of any problems until she was advised that Martens knew about the many checks made out to her, the charges said. She then took full responsibility for her crimes and said the thefts started when she was desperate for money to help treat her ailing dog.
She wrote some checks as small as $77.46 to pay utility and insurance bills and others as large as $5,112 for snow removal, the charges say. An independent audit of Balderson’s financial records determined she wrote 404 checks totaling $1,306,709.23 between January 2009 and September 2014, the charges say.
The fraud began with a theft of about $50,000 every six months, the charges say. In the last six-month period, Castillo took nearly $300,000. The companies she stole from were Blakely Properties, Brookstone Vanman, Chanhassen Retail and Stewart Properties.
If Castillo pleads guilty or is convicted by a jury, state sentencing guidelines recommend 49 to 68 months in prison. But Freeman said he will seek double the recommended time.
“We recognize that some of those in the criminal justice system focus too much on street-level drug cases,” Freeman said. “We don’t. The number of white-collar cases we charge and our track record reflect it. … In many ways, people can be badly harmed by theft, embezzlement and swindle.”