Guthrie Scandal

representatives to come to his office in City Hall. In a two-hour meeting, the Guthrie employees described the problem, and McFarlane advised them to have their accountants scrutinize financial records to try to find where the money was leaking.

That first phone call and meeting began a criminal investigation into a gambling-related embezzlement case that will end up costing taxpayers more than $100,000 by the time it closes on April 25, 2000.
Taxpayers already have spent more than $40,000 for the investigation and more than $25,000 for the prosecution and trial, and will spend about $30,000 to imprison the person responsible.

The motive for the thefts: a Guthrie clerk’s gambling compulsion that led her to empty the cash from the theater safe onto the blackjack tables at Mystic Lake Casino in Prior Lake, hand after losing hand.
The Guthrie case is an example of how costly a gambling-related crime can be for taxpayers, who have been victimized just as surely as the Guthrie was. An estimated $418,000 was stolen, and even after collecting on its insurance, the theater still lost more than $100,000. For every dollar stolen from the Guthrie, taxpayers will have spent about 25 cents to investigate, prosecute and incarcerate the thief. While the complexity of the crime makes this case more expensive than most, it is an example of how costly the investigation and prosecution of a sophisticated gambling-related crime can be.

The Investigation
The perpetrator in this case was Reva Wilkinson, a $7.25-per-hour accounts receivables clerk from Cedar who engineered a complex scheme to divert cash from a Guthrie safe into her own pocket. Between August 1992 and August 1993, Wilkinson stole about $418,000 by using checks paid to the Guthrie to cover the cash shortages in the safe, according to court records.

The plan worked for months. But when results for the fiscal year ending March 31, 1993, showed a $430,000 deficit, Guthrie executives knew something was wrong. An internal investigation first pointed to an embezzlement and months later identified Wilkinson as the chief suspect.

McFarlane conducted a preliminary investigation after the Guthrie’s accountants finished their work. He took formal statements and drove to Mystic Lake because Wilkinson had a history of gambling.
His final act was to meet with the FBI when it took over the case. The FBI stepped in because Wilkinson’s husband at the time was Ken Wilkinson, then Anoka County sheriff, and Minneapolis police wanted to avoid any conflict with a sheriff they routinely dealt with. The Wilkinsons have since divorced.

In all, McFarlane devoted about 24 hours to the case, and he called on support staff to help with the paperwork. Total cost to Minneapolis taxpayers: $929.48.

At the FBI, special agent Andrew Mento was assigned the case. The embezzlement and the mountains of financial records generated by the Guthrie and its accountants consumed 1,062 hours of his time in 1994 - more than half of a normal year’s work. With part-time help from seven other agents, Mento began the task of determining who had access to the money and then eliminating each suspect, said Herb Cousins, the FBI supervisor who oversaw the investigation.

Wilkinson refused to cooperate, and no one ever saw her steal money, so Mento had to prove the case by building a paper trail.

“This was a pretty complex investigation,” Cousins said. “What she did was pretty sophisticated in many ways. . . . It was very good work to uncover it. She wasn’t giving at all.”

But Mystic Lake’s security cameras provided plenty of help. Wilkinson was a familiar face on their videotapes of action at the high-stakes blackjack tables. She appeared as many as four or five times a week, sometimes staying for more than eight hours, and bet up to $1,000 a hand.

In all, the FBI devoted 1,788 hours to the case, at a cost to taxpayers of $38,668.11. The agency spent an additional $1,200 to have Wilkinson’s handwriting and fingerprint samples analyzed at the FBI crime lab in Washington, D.C.

"Unfortunately, that’s what it takes” to investigate a white-collar crime, Cousins said. “This was not one of our major investigations.”

The Prosecution
After the FBI built the trail of evidence that led to Wilkinson, Assistant U.S. Attorney Frank Magill took the case to a federal grand jury and got an indictment. On June 22, 1994, Wilkinson was charged with embezzling $310,591 from the Guthrie. Magill calculates that he spent between 200 and 300 hours reviewing the FBI investigation, presenting the case to the grand jury, preparing for the trial and arguing the case in court.

His boss, U.S. Attorney David Lillehaug, added eight hours overseeing the case, which commanded considerable media attention, and Magill also received help from support staff.

The Trial
After five days of testimony and just 2 1/2 hours of deliberation, the trial in federal court in Minneapolis ended on Dec. 12, 1994. Foreman Gene Kissner read the verdict: Guilty.

To assemble a 12-person jury, federal court officials called 42 people to the jury pool. Of that pool, 14 people were chosen as jurors or alternates. For each day they sat in judgment of Wilkinson, the jurors were paid $40.

That was only part of the jury costs. The government also paid for their meals. . Three jurors came from outside the Twin Cities and were reimbursed a total of $848 for transportation. One stayed in a hotel at a cost of $588 for six nights. The jury costs would have been higher, but two of the outstate jurors saved taxpayers $1,176 by staying with relatives in the area.

A court reporter was present throughout the trial, keeping a record of the proceedings. And a court security officer, provided through a contract with a private firm, was in the courtroom just in case - at a cost of $10 an hour.

And there was the judge, James Rosenbaum. In addition to the time he spent on the bench during the trial, he also conducted pretrial hearings and spent time reading briefs and other documents - a minimum of 20 hours extra.

There were other court costs not connected to the trial itself. Immediately after Wilkinson was arrested, the federal court’s Pretrial Services Office conducted a background check to help a magistrate judge decide whether Wilkinson should be released on bail. The office also helped Wilkinson smooth out some medical insurance issues - a total of eight hours of work.

After the verdict, probation officer Pamela McNulty conducted the presentence investigation, a job that involves gathering information about the defendant to give the judge a clearer picture of her life, from her family background to her finances. McNulty spent between 15 and 20 hours interviewing people, including Wilkinson, checking records and writing a report for the judge. That report, when McNulty’s salary and fringe benefits are calculated, cost $555.98.

The Incarceration
On Feb. 24, 1995, two months after the guilty verdict, Rosenbaum handed down the sentence: 30 months in federal prison, plus three years of supervised release. Wilkinson also was ordered to pay $3,000 in restitution. Normally, Wilkinson would have paid a fine ranging from $5,000 to $50,000, which would help defray some of the public’s costs. But Rosenbaum did not impose a fine because Wilkinson was broke.

She was taken into custody at sentencing. A month later, she boarded a U.S. Marshal’s Service 727 jet in Rochester, Minn., and was flown, along with other prisoners, to a prisoner transfer center in Oklahoma City. That is the national hub for the Marshal’s Service as it moves 160,000 prisoners a year, according to Kent Pekarek, division chief of the service’s prisoner transportation division in Kansas City, Mo.

Wilkinson first was sent to a minimum-security prison in Danbury, Conn. But after 3 1/2 months, her request was granted to be imprisoned in Texas, where she has relatives. She was flown back to Oklahoma City in July, and then bused to Bryan, Texas, where she is housed in a minimum-security prison. The daily cost to taxpayers: $38.01.

Wilkinson is scheduled to be released from prison on April 26, 1997. But taxpayers’ costs will not end that day.

Supervised Release
For three years after her release - minus one day - Wilkinson will be on supervised release. A probation officer will keep tabs on her, a cost that the federal government puts at $195.30 a month. Under Rosenbaum’s sentence, Wilkinson will pay the government $80 a month during that period, reimbursing taxpayers a total of $2,880. Wilkinson’s sentence also requires her, during her period of supervised release, to undergo treatment for compulsive gambling.