Big Boy owner says exec embezzled much more than estimated

Frisch’s Restaurants Inc., which operates 95 Big Boy diner locations in Ohio, Indiana and Kentucky, said a former executive stole more from the company than previously estimated.

A forensic review revealed that $3.9 million may have been embezzled, up from the $3.3 million uncovered when the alleged theft was disclosed in January, the Cincinnati-based company said Friday in a court filing.

Frisch’s sued former Assistant Treasurer Michael Hudson in January, alleging that he forged payroll documents and falsified accounting entries, then diverted company funds into personal accounts over several years. The alleged theft was discovered a month earlier after a new employee joined the finance department and discovered accounting irregularities, Tom Becker, a Frisch’s spokesman, said in an interview.

Hudson denied the allegations in a Feb. 17 court filing and asked that the case be dismissed. Hal Arenstein, an attorney for Hudson, declined to comment.

Hudson hasn’t been charged with a crime, said Jennifer Thornton, a spokeswoman for the U.S. Attorney’s Office in southern Ohio.

“Department of Justice policy does not allow us to confirm or deny the existence of an investigation,” she said in an e-mail.

There are at least five Big Boy restaurants in Indiana, including locations in Anderson, Greensburg and Richmond. The company has 6,100 workers, including 2,600 full-time employees.