Former NC CEO admits embezzling $15 million to fund ‘extravagant lifestyle,’ feds say
The former CEO of a North Carolina manufacturer admitted Wednesday to embezzling over $15 million to fund “an extravagant lifestyle” that included $500,000 in jewelry purchases and stays at pricey New York and Hawaii hotels, prosecutors said.
Taylorsville resident Donna Osowitt Steele also admitted to illegally spending $1 million on travel, $200,000 on family weddings, $100,000 on flowers and $100,000 on Gucci purchases, according to documents in U.S. District Court in Statesville.
Steele faces up to 20 years in prison and a $250,000 fine after pleading guilty Wednesday to wire fraud embezzlement scheme, U.S. Attorney Dena King said in a news release. Her sentencing date hasn’t been set.
Steele, who is free pending her sentencing, couldn’t be reached Wednesday. She declined comment when reached by The Charlotte Observer by phone on Dec. 18.
Bernd Motzer, CEO/president of Tigra USA Inc. in Hickory, where Steele pulled off her long-running scheme, recently told the Observer that the company is “gratified that justice is being done.“
Steele worked at the company for over two decades, from 1999 until she was fired in 2020, court records show. She was made CEO around 2015.
Tigra makes equipment for the metalworking and woodworking industries.
What the money was spent on
All told, authorities said, Steele spent over $1 million on travel for herself, family and friends, and over another $1 million on entertainment related expenses, the Observer previously reported
She spent $255,000 on stays for her, family members and friends at the Plaza Hotel in New York City and $110,000 at the Ritz Carlton Kapalua in Hawaii, according to prosecutors.
Nearly $7,000 in embezzled funds paid for a trip to a Notre Dame-Virginia Tech football game, the court documents show.
Of the $500,000 spent on jewelry, $455,000 was charged to credit cards for Jewelry Exchange purchases, authorities said. Steele also charged about $197,000 to Carolina Wedding for family members’ wedding expenses, authorities said in the court papers.
How the scheme unfolded
Steele used four types of financial transactions to pull off what prosecutors alleged in court documents was an “embezzlement scheme:” personal credit card purchases on company cards; checks; Quickbooks transactions; and wire transfers.
She opened bank accounts and credit cards in the name of her unsuspecting company and limited communication between employees and the company owners, prosecutors said in court papers.
Steele also told employees that “the owners were to be feared and they should be scared to communicate with them and/or should be careful around them,” according to a court filing.
And Steele used her position to respond to credit card companies when they flagged questionable purchases, according to court documents. “Yes these are okay and approved — thank you!” she’d reply, court records show.
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Impact on vendors, employees
Because of Steele’s actions, prosecutors said, vendors withheld products from the company due to late or non-payment, and customers complained about being placed on credit holds despite paying what they owed on time.
Employees weren’t paid on time, had their insurance canceled “without warning” and saw their company cards declined when they made legitimate purchases, according to court records.
This story was originally published January 12, 2022 at 4:29 PM.