Manager Gave Herself $30K Raise, Stole $1.3M from Law Firm, Feds Say

Unbeknownst to her California law firm, a longtime office administrator gave herself a $30,000 annual pay raise and better benefits by altering records on its computer, stealing some $1.3 million from Sacramento's Diepenbrock Harrison by this and other methods between 2003 and 2008, according to a federal prosecutor.

Regina Schenck, 46, has agreed to plead guilty to felony counts of computer fraud and filing a false tax return concerning the alleged embezzlement, reports the Central Valley Business Times.

Schenck lied to partners to get authorization for operating and client trust account checks she used to buy five horses and a horse trailer, in addition paying a federal tax lien and other personal bills, according to Assistant U.S. Attorney Matthew Segal, who is prosecuting the Eastern District of California case, and an affidavit for a search warrant that is discussed in another article.

The Business Times article doesn't identify the law firm or include any comment from Schenck or her lawyer, but a 2008 article by the Sacramento Business Journal article about the alleged embezzlement does. Schenck "is a wonderful person with a wonderful family who is truly loved by her children,” her attorney, Mark Reichel, said at that time. “She has led a flawless life up to this point."

Law firm managing partner Bradley Elkin described Schenck to the business publication as "a longtime, trusted employee who had been with the firm almost since the beginning."

Schenck reportedly was terminated on Sept. 12, 2008, a day after a Capital One Financial Corp. fraud investigator called Diepenbrock and asked whether it was standard procedure for the law firm to pay employees' credit card bills.

Schenck admitted that she had unilaterally given herself a pay raise, upping her annual salary of about $100,000 to $130,000, the Business Journal recounts.

In a plea agreement filed yesterday in federal court in Sacramento, Schenck has agreed to repay $1.3 million and not to file for bankruptcy to avoid the debt, the Business Journal reports in another article.

Reichel, who is still representing Schenck, says she has cooperated with the investigation and describes his client to the business publication as a wonderful person who is now paying for serious mistakes. She lost her home to foreclosure, according to the attorney, and is now living in a rental. After working for the Diepenbrock firm from 1994 to 2008, she is now unemployed.