Fraud leads to prison
What happened to the million dollars?
That's the question remaining after fraudster Katarina Hollis was this week jailed for three years, nine months after ripping off her employer Tony File Roofing by $969,513.
Judge Warren Cathcart, who sentenced the 39-year-old in Gisborne District Court, questioned why Hollis was unable to pay any reparation.
Had she agreed to do so, her sentence would have been reduced.
It “staggered” him someone who took $1 million in this way over three and half years had no potential to repay any of it.
Hollis was first employed by the business in 2015 until an accountant discovered her offending while doing the annual bookwork in August 2019.
In her role as part-time office administrator, Hollis worked for 20 hours a week paying invoices, wages and other expenses online. She was paid a wage of between $500 and $600.
But as she later told police, Hollis “wanted more, felt she deserved more, saw others with more and wanted to give her family the best she could”.
In March 2016, she began falsifying accounts — directing funds meant for genuine creditors, the IRD or ACC into her own accounts at two different banks.
Once she started taking the money, she could not stop, Hollis said.
Prosecutor Jo Rielly noted Hollis essentially embezzled about $300,000 a year.
She pleaded guilty to 42 charges representative of 391 fraudulent transactions made during the course of her employment.
She said she felt her offending was about to be discovered two days ahead of police interviewing her. She transferred $6000 from one of her banks to the other and withdrew $1000.
In statements for the court, business owners Tony and Jenny File said Hollis had not apologised to them and it seemed she would rather “do the time” than attempt to repay them.
Counsel Mark Sceats told the court all the money was gone — Hollis spent it on renovations to a rented property, everyday living expenses and consumable items, and had no assets.
Hollis' domestic partner (the company's contracts manager at the time) wanted to proceed with a previous tentative agreement for him to buy the business from the Files, who were soon to retire.
Reparation for Hollis' offending (discovered about two months before that previously proposed takeover) could be made from future profits.
But the Files refused, which was understandable given the circumstances, Mr Sceats said.
Judge Cathcart said Hollis gave no explanation for her offending and report writers were unable to explain it. But the motivation was clear to him – insatiable greed and a desire by Hollis to be seen as someone she was not.
She was “greedy” and “two-faced”, the judge said.
One of Hollis' faces everyone saw and liked. The other was marked by the mask of a fraudster, the judge said.
Her lavish lifestyle might ordinarily have been questioned by those very close to her but for some reason was not, he said.
Calculating her sentence, the judge set a sentence starting point of six years, noting the offending was high level, regular, brazen, and enduring. It involved constant deception of the victims.
He gave eight months discount for Hollis' lack of previous convictions and for a degree of previous “good character”, but noted her claim to it had long since expired.
By the time she was caught, her offending was an entrenched part of her character.
The judge refused to give discount for remorse. Remorse required insight, which Hollis lacked, he said.
Mr Sceats submitted Hollis was prevented by bail conditions from contacting the Files but had written an apology letter she would have given them at a restorative justice conference, but they declined to attend.
Mrs Rielly said the letter was 11th hour and expressed too little, too late.
There was a discount of four months for Hollis' background circumstances. The judge noted mental health issues had arisen for her since the disclosure of the offending but not to a level that might affect the length or type of sentence imposed.
She received a full 25 percent discount for her guilty pleas, the timing of which was reasonable, the judge said.
Further in their statements to the court, the Files spoke about their sadness, stress, and ill-health caused by Hollis, who they not only regarded as a trusted employee but as a close friend. It made them feel foolish, they said.
The offending was discovered the day their granddaughter was born and marred that happy occasion, Mrs File said. It was “surreal” and “like a bad movie” to find themselves — normal people in a local business that supported eight other families — in this situation.
It “spooked” her to think Hollis had been working in their family home all those years — offending right under their noses.
She had sometimes questioned how Hollis could afford various things “but Tony (File) said he assumed it was because Hollis' partner ‘wheeled and dealed'.”
Hollis became rude and intimidating towards her, Mrs File said.
“It began to seem like she was my boss.”
It made her stop asking for information about the business's finances.
Mr File said Hollis' pretence was of a model employee.
His family have since told him he was too trusting and sadly, which he now accepted. He felt punished for believing in people.
People might think his management of his business was flawed but no normal person could really comprehend the deceit and the relentless nature of Hollis' offending, Mr File said.
In 2018, his brother was diagnosed with a terminal brain tumour and for three months the Files were especially reliant on Hollis, who already had full insight into the business's finances.
Later, analysis showed that during that time alone she embezzled $63,284.
“And then she attended my brother's funeral — the cheek of it,” Mr File said.
The business faltered and the Files endured “months on end of being unable to pay creditors” while Hollis continued to steal massive amounts of the company's funds.
Hollis would then flippantly tell him there was no money that week for wages.
She would innocently stand by as he negotiated with banks to increase overdrafts or sold personal assets.
The Files had been looking forward to retirement and planned to spend more time with their family in Australia. But the future was now uncertain.
They had a block of land on which they once hoped to build their dream retirement home but had sold it and put the funds into the business.
Hollis had no regard for the ripple effect of her offending on the other families employed by the business.
“She robbed everyone of a future and burdened us all with the unknown,” Mr File said.