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Fraud charges against woman

Former accountant for O.C. Red Cross, which serves Newport-Mesa, is indicted.

January 19, 2007|By Michael Alexander

A federal grand jury on Wednesday indicted a former accountant for the Orange County Chapter of the American Red Cross on charges of embezzling more than $100,000 from the charity.

The indictment papers allege that Karen Shuerger, 58, formerly assistant director of accounting for the organization, ordered travelers checks ostensibly for the Red Cross and then spent them on herself and her family. It also accuses Shuerger of misusing a corporate credit card and altering financial records to hide her crimes.

According to the indictment, the checks were meant to pay for disaster aid and for relief workers' travel expenses. Instead, it states, Shuerger used travelers checks at Home Depot and spending money on visits to Sam's Town Hotel and Gambling Hall in Nevada. Personal items she allegedly bought include Gateway computers, a waterproof digital camera from the Sharper Image, membership to the San Diego Zoo, and Major League Baseball products.

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Shuerger lived in Santa Ana while employed by the local Red Cross chapter, which serves all of Orange County including Costa Mesa and Newport Beach. She resigned in 2005 after 17 years at the Santa Ana office and now lives in Henderson, Nev., according to a news release from the U.S. attorney's office in Los Angeles.

Shuerger faces five counts of honest services mail and wire fraud. Honest services fraud implies a breach of the public trust, said Thom Mrozek, a U.S. attorney's office spokesman. Each count carries a maximum sentence of 20 years in federal prison.

The Red Cross cannot comment in detail on an ongoing investigation, said Jenny Kerrick, a spokeswoman for the Red Cross in the area including California.

"The Red Cross has a zero-tolerance policy toward fraud and misuse of its funds," she said. "We will continue to cooperate with the FBI throughout this investigation."

Mrozek said the Red Cross referred the matter to the FBI. Kerrick confirmed that initially a Red Cross forensic audit uncovered potential impropriety by a mid-level employee.

Shuerger has been summoned for an arraignment on Feb. 5 in federal court in Santa Ana.

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