A former employee of Indianapolis-based SerVaas Laboratories Inc. has been sentenced to 27 months in prison after admitting to defrauding the company out of nearly $772,000 over an eight-year period.
Sandra M. Urich, 54, of Indianapolis pleaded guilty to one count of wire fraud and was sentenced Friday by U.S. District Court Judge James R. Sweeney II.
According to the charging document in the case, Urich started working for SerVaas in 1995, and her job involved processing customer orders and credit card payments. Her fraud scheme is believed to have begun in 2011 and continued until January 2019. She was terminated that month after the company discovered her activities.
“She was a long-term employee that betrayed everyone’s trust here. It was disappointing and sad,” SerVaas Chief Financial Officer Matthew Selig told IBJ.
SerVaas manufactures the famous Bar Keepers Friend line of cleaning products. Its corporate offices are near Guion Road and 52nd Street on the northwest side.
According to court documents, Urich committed the fraud by accessing actual customer orders and then inputting fake returns or refunds for those orders, directing those payments into her personal bank accounts. Urich took several steps to conceal her activities, including eliminating records of the orders associated with the false refunds.
Over time, prosecutors say, Urich processed about 990 fraudulent returns or refunds in this manner.
Selig said the company discovered the fraud when an employee found evidence of an order that Urich had deleted from the company’s records.
In addition to her prison sentence, Urich was ordered to serve two years of supervised release after her term ends and to pay financial restitution. SerVaas is to receive $271,927 in restitution and Chubb Insurance, which covered most of SerVaas’ losses, is to receive $500,000.
Indianapolis attorney John L. Tompkins, who represented Urich, said his client has owned up to her actions. “She didn’t try to make excuses. She accepted responsibility,” he said.
Tompkins said Urich intends to pay the ordered restitution though it will be difficult.
“Her current employment is as a bus driver and she’s going to lose that job,” he said.
Bar Keepers Friend was invented in 1882 by Indianapolis chemist George William Hoffman, who made an unexpected discovery after cooking a pot of rhubarb in a tarnished pan. The process of cooking the rhubarb cleaned the tarnish off the pan, and Hoffman discovered it was the oxalic acid in the vegetable that was responsible. Hoffman created an oxalic acid-based cleaner and Bar Keepers Friend was born.
Late business and civic leader Beurt SerVaas, who died in 2014, purchased Bar Keepers Friend from Gisler Polish Corp. in 1956, forming SerVaas Laboratories. The company remains family-owned.