Damsel in Diamonds

MICHAEL SKRYPEK

Only 21 years old, newlywed Vicki Barnes relocated to Virginia with her husband, Tanner. Their relationship was explosive and at times violent on the part of both spouses. Just a few years into the marriage and two children later, Vicki and Tanner separated. It was an unforgiving separation leading to a bitter divorce, and Tanner fled the state, never to return.

Following numerous other spiraling relationships, heart-wrenching breakups and living paycheck to paycheck, Vicki met Robert Bickett. A steady and hardworking man, he openly accepted and embraced Vicki's children as his own. Robert soon proposed marriage, and the beautiful but exhausted Vicki eagerly accepted. She was worn down from ten years of countless temporary, dead-end jobs and personal relationships. Since Robert earned a generous income, he insisted Vicki be a stay-at-home mom. Robert told Vicki she was never to worry about money again. Soon, the Bicketts doubled the number of children in their household with two of their own.

As the years progressed and her youngest child became a teenager, Vicki wanted excitement and new challenges beyond child care and housekeeping. During one of her shopping sprees, Vicki stopped at her favorite store, Viceroy Jewelers. Through the years, Vicki had become a well-known and well-liked customer at Viceroy. She appeared to have a bottomless bank account, selecting numerous items for purchase during each visit. During one, Vicki inquired about the posted employment opportunity for a sales associate. As store manager Marie Torres explained the job expectations and benefits, Vicki's eyes flashed with excitement. After years of service to her husband and children, Vicki wanted to get away from domestic duties and start what she hoped would be a long-term career. Vicki was hired.

Attractive and flirtatious by nature, Vicki quickly became a rising sales force in the business; she had a predominant male clientele base. Many of Vicki's clients returned for repeat jewelry purchases, and others just stopped by to talk, some with gifts and dinner invitations for Vicki. As time progressed, she became entangled in several extramarital affairs with her male clients.

It wasn't long before the Bicketts' marriage became strained due to failing commitment from both partners. Vicki and Robert separated and had numerous unsuccessful attempts to reengage the relationship in the following years.

Viceroy Jewelers

Viceroy Jewelers was one of the largest jewelers in North America. It originated as a family business on the northeastern coast of the United States in the early 1900s. During the next 100 years, the company evolved into a publicly traded corporation while expanding across North America, owning and operating more than 1,800 retail unit locations. The corporation's continued expansion was a direct result of revenue reinvestments to perpetuate product acquisition and licensing, personnel recruitment and training, technology development and business planning. Viceroy owned and operated its own credit center, distribution center, e-commerce business and insurance service groups, in addition to the ownership of multiple retail divisions.

The Viceroy Jewelers' retail unit where Vicki worked was in an economically depressed, blue-collar area. The store employed a store manager, office manager and six to eight sales associates. It was one of 14 stores overseen by an area manager, who was supervised, along with five other area managers, by a territorial vice president. Although surrounded by competitors in its midsize metropolitan area, the business unit generated approximately $1.5 million annually from sales of jewelry merchandise, jewelry repairs and insurance replacement services. The corporation had recently experienced a decline in sales due to softening national and global economic conditions. Numerous locations had been closed across the continent, corporate and field personnel were reduced and the focus shifted to expense reduction and control.

One Thing Leads to Another

I had been employed with Viceroy Jewelers for approximately ten years at the time of this investigation. I covered nine states with direct fraud examination responsibilities encompassing more than 200 retail units. My responsibilities included conducting property and financial crime investigations, mostly dealing with employee theft. As a senior investigator, I also supervised seven others who collectively covered the remaining 1,500-plus retail units across North America. We used computer-based exception reporting that generally occupied the morning hours of our workdays, compiling, sorting and analyzing data relating to all aspects of business performance. In addition to computer-based exception reporting, we also used profit and loss statement analysis and various related audit-based computer reporting programs. Unannounced visits to field locations and business unit compliance auditing as well as frequent communications with our operations counterparts were vital and of great value to ensure business control and quick response to problems.

Last fall, a review of payroll exception reports indicated possible noncompliance with payroll entry and reporting policies at the Viceroy Jewelers located in Walter, Virginia. Further investigation and review of the store's electronic access opening and closing records, compared to payroll records, indicated possible payroll fraud. The amount of potential fraud appeared to be minimal at best. Further research of computer-based exception reports did not reveal any major profit and loss exceptions but did reveal some minor areas of concern for slightly increasing costs relating to insurance product replacements.

The store was only about an hour from my office, so I decided to go by for a visit.

When I walked into the Viceroy store, I greeted the employees and told them I was there for a compliance audit and business survey. I mentioned I would also need to talk with everyone and that I appreciated their time and assistance. Naturally, when someone from corporate visits a store — especially someone from corporate who conducts audits and investigations — the employees become a little nervous. During an investigation, that nervousness usually diminishes in honest employees during both nonspecific and specific questioning. When the nervousness increases during questioning, that usually is a warning sign of the need for increased attention.

After I reviewed the audit documents, I began meeting with individual staff members. I remembered from past store visits that the associates were usually upbeat and did not talk about each other negatively. The staff had appeared to be a close-knit family, with a positive attitude shared by associates and directed toward one another. But not this time.

It was obvious that tension had developed in the store; in particular, it appeared as though everyone had something negative to imply or suggest about Vicki Bickett. When I asked about the payroll adjustments, almost everyone voiced mild suspicions that Vicki fraudulently adjusted her recorded hours, yet no one had bothered to use the corporate anonymous tip reporting line or to call me directly with any concerns.

No one produced conclusive examples of wrongdoing relating to the alleged payroll fraud, yet when I attempted to drill down on particulars, many associates became increasingly nervous and evasive.

I eventually interviewed Vicki, and she denied any intentional wrongdoing. She said her payroll adjustments were due to her lack of understanding about the payroll system and procedures.

I investigated the store's payroll accounts further and found many other “errors,” some by the same associates who accused Vicki of wrongdoing. I concluded my audit the following day and arranged to meet with the store manager, Marie Torres. I informed her of my findings and concerns about Vicki and other employees. When I finished, Marie almost seemed disappointed that I had not discovered conclusive evidence of wrongdoing by Vicki. I wondered how Vicki, who at one time seemed to be a well-liked and respected member of the team, had become a target of her boss and coworkers. Perhaps I was misreading the situation and there was just a little tension between competing sales associates, since Vicki had become popular with customers and her sales performance continually improved.

But why would Marie not diffuse the tension and pull the team back together, as she had done in the past when minor eruptions of personalities and tension occurred?

I shared my concerns with Marie and advised her of my intent to requestion some associates to calm my curiosity. At that point, Marie admitted she had more information to share with me. She said she and several of the sales staff suspected Vicki Bickett of perpetrating an insurance fraud against the Viceroy Jewelers corporate insurance department. Marie stated that she and several of her employees had talked about their suspicions and hoped there would be a way to get rid of Vicki without confronting her directly or reporting it to the corporate office.

The Truth Comes Out

Marie said she and her coworkers had recently seen Vicki wearing a $6,250 diamond ring that Vicki had claimed was stolen from her residence five years before. Apparently she had purchased the diamond ring from the Viceroy Jewelers location approximately six years ago. Vicki had worn the diamond every day since the purchase, until she came in one day and said that it had been stolen, along with other jewelry, from her home while she was sleeping the night before. Vicki said she had called the police and filed a report prior to going to work that day.

Marie told me the story seemed strange to her at the time, but the involvement of the police reassured her that Vicki was being honest. When Vicki originally purchased the ring, she also took out a theft insurance agreement, and Marie allowed Vicki to process her own claim through the corporate office. She had been fully reimbursed.

I said Vicki could have purchased a replacement ring with the insurance payment, but Marie said that was not the case. She clearly remembered Vicki using her insurance payment to purchase other new jewelry at the store. I pulled the insurance documents from store files and asked Marie not to discuss the matter with any associates. Then I concluded my visit and returned directly to my office.

Solving the Paperwork Puzzle

That same day, I called our insurance department and spoke with claims processor Nora Jacobs. She reviewed the notes in the file and said the claim originally had been denied based on insufficient requirements to process it. Nora said additional paperwork, including a police report of loss, had been received, signed by Robert Bickett. I decided to research online and discovered the insurance claim was filed after the Bicketts' rather hostile divorce. Why would Robert help Vicki with an insurance claim when they were no longer together?

I reviewed the electronic sales database for Vicki and her family and found a record of her original purchase but no replacement purchase of the same ring. Then I pulled up a description and photos of the ring in question and emailed the information to Marie Torres. She confirmed it was the same ring Vicki had begun wearing again recently.

That same week, I received claim files from Nora. Robert Bickett's signature on the claim paperwork strongly resembled Vicki's handwriting. I also learned that Robert had left the area and was not in contact with Vicki following their tumultuous separation and divorce.

I traveled to Vicki's local police department and requested a copy of the police report she had filed years earlier. The report showed that Vicki gave the police a written statement, claiming that she awoke in the middle of the night and noticed the jewelry missing from her dresser across the bedroom. She wrote that she got out of bed, searched her bedroom for the jewelry without success and returned to bed without looking anywhere else. Vicki filed the police report the next day. There was no indication of forced entry or the presence of anyone else in the residence that night. Vicki's statement to the police claimed the stolen jewelry included the diamond ring in question, an additional diamond band and a gold bracelet, totaling $8,250 in losses.

I continued my online research and found that Vicki had multiple civil actions against her for nonpayment for financial goods and services, including collection processes by three different financial institutions. I also uncovered the Bicketts' divorce record, a domestic violence charge and conviction against Vicki for a past altercation with Robert, along with bankruptcy and foreclosure filings. At this point, there were no absolutes, although investigative experience indicated there was a good chance that Vicki had committed insurance fraud to avoid or delay what appeared to be imminent financial ruin.

I called Marie again to ask if there were further developments. She told me that Vicki didn't wear the ring to work every day but seemed to wear it often on her weekend shifts. During my last visit to the store, I had retrieved digital video surveillance images, but the footage was inconclusive as to the specific jewelry Vicki had worn on previous shifts.

I told Marie I had prepared my investigation and planned on interviewing Vicki the following week. Again, I told Marie not to discuss any aspect of the investigation with the staff. I concluded the call by asking Marie to contact me immediately if she saw Vicki wearing the diamond ring during a shift prior to my visit to the store. I told Marie I would most likely see her next week but could not pinpoint a date since I had numerous other scheduled appointments and meetings.

Duty Calls

That Saturday Marie called me to let me know Vicki had just arrived at work and was wearing the diamond ring. I told my wife I needed to take care of an urgent work matter and canceled our Saturday afternoon plans. I put on a suit, grabbed the case file and my computer bag and aimed the car toward Walter, Virginia. About an hour later I walked into the store. I immediately noticed Vicki, dressed to the nines, laughing with a male client at a diamond showcase. As I walked past Marie, I quietly inquired if she had adequate floor coverage for me to talk with Vicki. Marie barely lifted her head and nodded affirmatively. I continued walking and stood near Vicki at an adjacent showcase. I had my head down as though I were looking into a neighboring showcase, but my eyes were focused on the diamond ring on Vicki's hand. It was an exact match to the pictures I had in my computer bag.

When Vicki concluded her conversation with the customer, she looked in my direction and seemed surprised to see me. I smiled and immediately outstretched my arm to shake the hand that displayed the sparkling diamond ring. She greeted me through a painted smile and was obviously uncomfortable. I said, “Vicki, great to see you; by the way, that is a beautiful diamond ring,” as I pointed to her finger. She dropped her head, glanced at her hand and timidly thanked me. I told Vicki I had to speak with her in private and asked if I could buy her a cup of coffee. She quietly agreed but said she had to retrieve her purse locked in the back office. I quickly replied that there was no need and that I was buying the coffee. I motioned with an outstretched arm toward the exit and told her it was pretty important we talk in private immediately. She walked around the showcase and we left the store together. As we walked toward the neighboring coffee shop in the mall, she told me she did not want coffee and inquired as to the reason for our private conversation. I told her we would talk in detail momentarily. I selected a table in a quiet area of the food court and we sat down.

As I began talking, I noticed Vicki had moved her hand from the table to her lap, out of my sight. As I continued explaining why I was there, Vicki's hand reappeared on the table, but the ring was missing from her finger. I presented paperwork and narrowed my interview focus. At one point in the interview, she raised her voice and appeared to be rallying in her mind for an upcoming strong denial. I remained professional, constant and persistent, and talked through her words. As I continued my interview, she began to slouch in her chair, her chin and head dropped downward and tears began to stream down her face. I continued to question her until we eventually reached the point when she acknowledged her wrongdoing.

At that time, Vicki retrieved the ring from her lap and placed it on the table. I took a picture of the ring with my cell phone and placed it back on the center of the table, between us. I recapped various aspects of the investigation and my understanding of the chain of events. She remained somewhat quiet, occasionally glancing upward and making brief eye contact with me to silently acknowledge the accuracy of my statements with a nod of her head. She eventually talked me through the $6,250 insurance fraud she had perpetrated against Viceroy from start to finish. Vicki continued and detailed the additional $8,250 insurance fraud against Westlynn Insurance, her homeowners' insurance company, for the same diamond ring in question, another diamond band and a gold bracelet. Vicki admitted the jewelry was never stolen. She admitted she had forged Robert's signature on various documents and filed a false police report and false insurance claims.

Vicki also admitted to several hundred dollars of fraudulent payroll adjustments for herself and to hundreds of dollars of repair service fraud. She explained how she retrieved actual information from customer-service agreements and used those accounts to perform jewelry repair work on jewelry she, her family and select customers owned free of charge.

When the time was right, I slid a blank legal pad with two black pens on it across the table toward Vicki. I asked her if she had been truthful to me about everything we discussed and asked if she had anything else to share with me at that time. Vicki said there was nothing more to tell me, so I asked her to recap our entire discussion in writing.

Over my years of investigation, I've realized that writing can be cathartic for the soul. Vicki seemed to feel the same way, as she filled each line and turned countless sheets of paper on the pad as she hurriedly began to write on the next fresh sheet. It was almost like she was worried she might lose her thoughts. When she finished writing, I asked her if she wanted to voluntarily surrender the diamond ring to me at that time. Vicki pushed the ring toward my side of the table and said, “It's yours. It belongs to the company. I know what I did was wrong.” I asked her to write one last voluntary statement, explaining why she wanted to surrender the ring. She agreed and wrote yet another statement detailing her feelings and desires to give the ring back to the company, in my care. I concluded our interview and told Vicki we needed to tell Marie about our conversation. Vicki agreed and we walked back to the store together.

Once back at the store, Marie, Vicki and I met in the private office and I recapped Vicki's admissions. I asked Vicki to confirm my account, and she did so while apologizing to Marie. We suspended Vicki's employment at that time, obtained her keys, provided her with her belongings and escorted her from the store. The diamond ring was cataloged, sealed in an envelope with my signature and a time stamp and secured in the safe as evidence.

The following Monday, I reviewed the investigation with my boss, our corporate insurance group, human resources and legal. Vicki was contacted by her area manger later that same day and informed that her employment was terminated.

Police Involvement

Later that week, the local police department reviewed my case file and Detective Benny Michaels, whom I had worked with on a previous case, referred me to the neighboring town where Vicki lived, since that was where the falsification of the original police report occurred. Detective Michaels helped me schedule an appointment with Detective Dave Vasek for the following day.

Detective Vasek seemed pleasantly surprised with the thoroughness of the investigation and seemed eager to continue where I had left off. He contacted Westlynn Insurance Company and obtained additional documentation relating to Vicki's claim.

Vasek contacted Vicki the following day and requested she meet him at the police station for an interview. Vicki quickly consented and was there within the hour. Vasek reviewed the entire investigation with Vicki and asked her supplemental questions. However, Vicki refused to answer any questions without an attorney. She asked to leave, and Vasek told her she was free to do so.

After she left the police station, Vasek drove to the prosecutor's office and signed a criminal complaint against Vicki. He then drove directly to Vicki's home, reintroduced himself and arrested her on the spot. She was charged with one felony count of falsification and two felony counts of insurance fraud. Vicki's new fiancé, Tim Bitwell, later posted a $7,500 bond, and Vicki was released from custody.

Months later, just before the preliminary hearing at the courthouse, I met with Detective Vasek, Prosecutor Ted Ryan, Defense Attorney Jim Painter and two representatives from the Westlynn Insurance Company. During the meeting, the Westlynn representatives made several demands and said if they received immediate restitution, the company would consent to reduced charges against Vicki, who remained silent throughout the meeting. Detective Vasek looked at me several times as Painter, Ryan and the insurance representatives negotiated the case. Vasek was cut off several times when he tried to comment. I remained silent and leafed through my case file. Finally the lawyers and insurance agents reached an agreement that seemed to make everyone happy except me and Viceroy.

Painter said Vicki would send a restitution check to the Westlynn Insurance Company within days. In turn, the charges and possible sentences against Vicki would be reduced. Apparently, since I had recovered the diamond ring, all was good in their eyes. Painter talked quickly and was eager to share the plea agreement with the judge. Both lawyers began to gather paperwork, assuming the meeting was over. I stood up, collected my paperwork into the case file and said, “Guys, no deal. I want to continue with the original charges and, if need be, forsake the restitution. After all, there is always civil court following Vicki's sentencing.”

Painter, visibly angered, began to question my authority and intentions. I glanced at Vasek who sat quietly with a smile on his face, looked back at Painter and Ryan and said, “It's great these folks from Westlynn showed up after the good detective and I solved the case for them, but if there is a restitution line, Viceroy will be at the head of it and everyone else can get in line behind me.” I went on to explain that the recovered ring would not suffice as restitution because Viceroy was not a pawn shop. We did not sell stolen or worn merchandise to unsuspecting customers. In my eyes, the ring was worthless, other than securing it as evidence for Vicki's prosecution. Painter seemed outraged. I then suggested to Ryan that we should pursue the original charges and mentioned if he was questioned by the judge as to why a plea agreement was not reached, I had absolutely no problem addressing the court with my concerns.

Ryan and Painter stepped away from the table and briefly conversed before including Vicki. Ryan asked to adjourn the meeting for an hour, and as we all walked out to the lobby, Ryan, Painter and Vicki walked over to Vicki's fiancé, Tim Bitwell, who was waiting in the lobby.

About 50 minutes later, Vicki and Tim returned and sat across the lobby from Vasek and me. Ryan entered the lobby moments later and our meeting reconvened. As Painter sat at the table with his head down, not making eye contact with me, Ryan slid a certified check for $6,250 across the table to me. He also passed a check for $8,250 to the Westlynn representatives. Ryan asked if I had any objections to a plea agreement for reduced charges against Vicki at that point. I said, “No sir, not at all.” The police would later release the ring to Tim, at the prosecutor's direction. The case was quickly concluded without trial.

Detective Vasek later informed me that Tim Bitwell had visited two banks during that hourlong break from the courthouse. He exhausted some personal accounts and tapped into his retirement savings to help Vicki out of the mess in which she had put herself. I later learned that shortly after her court-appointed probation ended, Vicki broke up with Tim to pursue another man.

I guess history does repeat itself.

Vicki also landed a job in another jewelry company in a neighboring county, but her employment was short-lived. Perhaps she was terminated for theft? Maybe management completed a background check, detected her criminal history and acted before she could? I hope it was the latter.

About the Author

Michael Skrypek, CFE, has 25 years of experience conducting and supervising financial and property misappropriation examinations throughout the United States and Canada. Mr. Skrypek, a Certified Fraud Examiner, is currently a member of the board of directors for a local Association of Certified Fraud Examiners chapter.