Indianapolis woman to be sentenced in $5M embezzlement scheme

July 29, 2016

An Indianapolis woman faces up to 20 years in prison when she is sentenced as early as next month in a case involving the embezzlement of $5.5 million from a local data-storage company.

Kristi Suzanne Espiritu, a former office manager with Indianapolis-based Network Storage Inc., was originally charged with wire fraud and money laundering on May 19 in U.S. District Court for the Southern District of Indiana. Federal prosecutors said she had access to the company's bank accounts in her job, and she used the firm's money to pay for personal travel, jewelry, handbags, furnishings and more.

The wire fraud charges are punishable by a maximum of 20 years imprisonment and a $250,000 fine. The money-laundering charges involve up to 10 years imprisonment and $250,000 fine. Federal officials are seeking full restitution of the bilked funds, by means including asset forfeiture.

Espiritu signed a plea agreement in May and is awaiting sentencing. U.S. District Court Judge Jane Magnus-Stinson is expected by August 9 to schedule a sentencing date, which could be as early as a few weeks later.

Officials at the U.S. Attorney's Office declined to comment. Espiritu's attorney, Jeffrey Baldwin of Indianapolis-based Voyles Zahn & Paul, didn't reply to requests for comment other than to say he expects sentencing to take place six to eight weeks from now.

Federal authorities said Espiritu's scheme took place between 2008 and 2014. As NSI's bookkeeper, the lawsuit against her said, she had purview over accounting ledgers, payroll systems and the company's accounts with the National Bank of Indianapolis.

She used that access to pay off expenses on her personal credit card, the lawsuit said. For example, Espiritu spent about $191,600 on her personal credit card between March 10, 2014 and April 10, 2014including just under $48,000 at Distinctive Diamonds in one day and just under $50,000 at Saks Fifth Avenue in three weeks.

The lawsuit said from April 11 until May 9 that year, she made 13 electronic payments for $10,000 each from NSI's bank accounts to her personal credit card to cover those expenses. In the company's QuickBooks system, the lawsuit said, Espiritu falsely claimed those payments to her credit card were for reimbursement for business expenses, including "marketing and training expenses."

Espiritu's scheme wasn't limited to having her company cover her credit card expenses, the lawsuit said. She engineered electronic transfers from the company's bank account to her personal checking account, authorities said, falsely claiming all the funds represented reimbursements for business expenses.

She authorized about $404,000 in checks made out to her under the same false pretenses, authorities said, and intentionally overpaid her credit cards with company cash in order to receive reimbursement checks from those credit card companies, which she kept.

Espiritu also filed for Chapter 13 bankruptcy in Southern Indiana Bankruptcy Court in June. She filed as Kristi Suzanne Moon and acknowledged she had a previous name of Kristi Espiritu.

According to the bankruptcy filings, Espiritu reported assets worth $93,850 and liabilities worth $278,765. She said she had monthly income of $7,918 and monthly expenses of $7,738.

Founded in 2003, NSI was acquired by Michigan-based Data Strategy in October 2014.


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