by Mike Donoghue, News Correspondent, Vermont Business Magazine A Bristol woman is facing 19 federal felony fraud and tax charges in connection with a more than $700,000 embezzlement from a family-owned wood-logging and wood-chipping company in Addison County, court records show.
Jodi R. Lathrop, 53, of Rounds Road is charged with seven counts of wire fraud and four counts each of mail fraud, tax evasion and aiding in the preparation of false corporate income tax returns for Claire Lathrop Band Mill Inc. doing business as Lathrop Forest Products, the federal indictment said.
Lathrop began work in 1994 in the South Street office of the Bristol business, which was owned by her husband Jason and brother-in-law Justin Lathrop, records show. By 2014, she was the only employee in the office and had attained the title of office manager, court records show.
Bristol Police began the initial investigation, which showed Lathrop unlawfully took $712,244 between April 1, 2015 and May 31, 2020, according to a court affidavit by Police Chief Bruce Nason.
Nason wrote the theft was a combination of Lathrop writing checks to pay personal financial obligations, making purchases, increasing her wages/salary without authorization, and inflating prices paid for wood sold to the company from forest lots owned by Lathrop and her husband, Jason.
Nason's investigation showed Lathrop overcompensated herself with regular and overtime pay to the tune of $139,311 between January 2015 and January 2020, the affidavit said.
Bristol Police ordered Lathrop into state criminal court for April 12, 2021, records show. A judge found probable cause for the felony charge, but the arraignment never happened when the Addison County's State's Attorney's Office opted to hold off to allow the U.S. Internal Revenue Service to conduct an expanded criminal investigation, records show.
Assistant U.S. Attorney Gregory Waples obtained the 19-count indictment against Lathrop from a federal grand jury meeting secretly in Burlington on Tuesday.
No arraignment date had been set in U.S. District Court in Burlington as of early Thursday afternoon.
The indictment also includes a forfeiture request for Lathrop if she is convicted for any of the 11 mail or wire fraud charges. The indictment says the government is seeking at least $400,000 and possibly more as a result of proceeds that Lathrop received from her unlawful actions.
The indictment also notes that between 2014 and 2019 Lathrop evaded paying about $141,000 in income taxes.
Lathrop also provided false information to a tax preparer based in Vergennes that led to inaccurate tax returns, the indictment said.
Lathrop devised a scheme to defraud the Bristol business by embezzling from its multiple bank accounts between June 2014 and April 2020, the federal indictment said.
A big part of the fraud centered on writing unauthorized checks to pay personal credit card bills for herself -- and at times the credit cards for her children, the indictment said. Unauthorized checks also were used to pay for personal expenses, while company credit cards were used to buy items for her personal use. Lathrop then wrote unauthorized company checks to pay for those bills, the indictment said.
