Federal Grand Jury Indicts Former aio Accounting Clerk for Bank and Tax Fraud
Indictment indicates “complex scheme” to divert payments intended for HONOLULU Magazine.
A former collections analyst for aio, HONOLULU’s parent company, was indicted by a federal grand jury last week on 32 counts of bank fraud totaling more than $3.8 million, which the indictment alleges was diverted from HONOLULU Magazine and Ala Moana Magazine from 2009 to 2014. In one indication of the complexity of the scheme, the indictment says the former employee also repaid almost $2.5 million of the stolen money to conceal her fraud.
Johanne Jarlego, 44, was indicted by a U.S. District Court grand jury June 21, but the charges were sealed until Monday (June 26) when she was charged and pleaded not guilty in court.
Susan Eichor, aio president, said that once irregularities were discovered by aio, “the company engaged an independent third-party to conduct a thorough investigation and learned the checks intended for deposit were diverted from the company in what investigators called a very complex scheme,” Eichor said. Ultimately, none of aio’s clients were affected financially, she said. The investigation confirmed no other employee was involved in this incident.
Jarlego is no longer with the company.
According to the indictment, she received and collected checks intended to pay for advertising in the magazines, then deposited checks to companies called Ala Moana Trinkets, Books and Magazines; and Honolulu Trinkets, Books and Magazines (referred to in the indictment by their initials), “falsely making it appear that she was doing business as a retail store offering books, magazines and reading material.”
She diverted $3,833,640, but repaid $2,428,600 to the company “to conceal her scheme and keep it alive,” the indictment alleges. Since that time, Eichor said, the company has reviewed financial procedures and taken additional precautions.
Jarlego was also charged with four counts of filing a false tax return.
She was employed by aio from October 2004 to March 2015. aio is the parent company that publishes HONOLULU Magazine and, at the time, published Ala Moana Magazine, under contract with the shopping center. “We were just incredibly shocked and disappointed, particularly because of the premeditation,” Eichor said.
Human resources director Ken Miyasato said: “The foundation of our workplace is built on trust. To find out our trust has been betrayed obviously comes as a major disappointment.”