David Warren wishes he had received a warning of some kind.

Warren, 65, said recently he would not have hired an Exeter woman who allegedly embezzled more than $125,000 from his business if he had known she previously had been accused of stealing $107,000 from a Bangor restaurant.

Unfortunately for the Surry forester, he never had the chance.

Cecelia White, 40, never was criminally charged with embezzling money from Asian Palace, but she was ordered in 2002 to repay the money after the restaurant owner successfully sued her in Penobscot County Superior Court.

Because White does not have to be licensed by the state, and because she was not criminally convicted in the Bangor embezzlement, Warren effectively was unable to find out about her past before she allegedly took even more money from his small forestry business.

Had she been charged the first time and then convicted, a simple $25 criminal history check would have brought the Bangor embezzlement to light long before Warren suffered a heart attack this past spring and his employees began having trouble getting their wages paid.

“We had no way of knowing, except we started bouncing payroll checks,” Warren said. “She just cleaned us [out].”

Lack of prosecution

Why White was never prosecuted for the restaurant embezzlement, however, is unclear.

Officials in the state Attorney General’s Office and the Penobscot County District Attorney’s Office each said last week that they did not review the case or consider filing charges against White.

U.S. Attorney Paula Silsby, the top federal prosecutor in Maine, said last week she could not verify whether her office considered prosecuting White in 2002. The only thing on which she was allowed to comment, she said, was that her office did not prosecute White.

According to Penobscot County Superior Court documents, Asian Palace owner Marilyn Lau sued White after White allegedly embezzled $84,800 the restaurant owed in state and federal payroll taxes and $20,000 more that she told Lau also was owed in payroll taxes.

On Nov. 16, White was charged by Maine State Police in Ellsworth District Court with embezzling “in excess of $125,000” from Warren’s business, for which she worked part time for two years balancing the books. Although she has been officially charged, she has yet to be indicted.

According to Warren, however, the amount he lost in the embezzlement scheme is closer to $220,000, nearly 9,000 times the amount of money a criminal history check would have cost him.

White could not be reached for comment Friday.

Bangor attorney Joseph Baldacci, who represented White in the civil matter, declined comment Thursday on that case. He also declined comment on whether he is representing White in the alleged Surry embezzlement.

Lau’s attorney, Steve Blackwell of Bangor, said Thursday that two years ago he and Lau shared information on the restaurant embezzlement with the FBI, which investigated the case. Jay Martin, an FBI spokesman in Boston, declined Thursday to confirm whether the federal agency investigated the case.

Blackwell said his client was not reluctant to pursue criminal charges against White.

“We were never told why there was never a prosecution,” Blackwell said.

Assistant Attorney General Leanne Robbin, chief of the state’s financial crimes unit, declined to comment on any allegations against White but said that sometimes a case is better handled with a civil lawsuit because the standard of guilt is different for criminal and civil cases.

“We have to prove a case beyond a reasonable doubt [in criminal cases],” she said. “It’s a much higher standard in a criminal case.”

Because embezzlement cases are labor-intensive to prosecute, she said, prosecutors have to consider whether other cases might bring more “bang for the buck,” Robbin said. They also have to consider whether a judge is likely to impose the penalty prosecutors seek or may be more lenient with a convicted defendant, she said.

Nonetheless, white-collar crime such as embezzlement is important to prosecute because it often is more carefully calculated and deliberate than other crimes, according to Robbin. Recidivism, she said, is another reason to prosecute white-collar criminals.

“That’s exactly what the criminal law is there for,” she said. “You’re talking about plain old greed.”

New allegations

According to David Warren, he and his wife authorized White to sign checks on behalf of his forestry business, which over the course of a year employs five to 10 people. He said recently that White allegedly started writing unauthorized company checks to herself last spring, after he suffered a heart attack.

“Whatever was payable, she was to pay it,” he said. “That’s why we hired her, to take care of it.”

Warren, 65, said he hired White in the early months of 2002, while she was being sued in Penobscot County, after she responded to a newspaper ad he placed seeking bookkeeping help. It wasn’t until this past spring when Warren approached police and told them he thought White was embezzling from him that he found out about the 2002 court decision against White.

Warren said White offered references to him when she was hired but that he never checked them.

“She had the credentials and she had the spiel down pretty good,” Warren said. “She was damn good on the computer.”

Warren claims that he lost his health insurance because White did not pay the premiums, and, as a result, he now has medical bills in excess of $50,000.

“It’s just been a personal disaster,” he said. “It’s pretty damn devastating to be 65 and to come up short $220,000.”

Background checks

According to Stephen McCausland, spokesman for the Maine Department of Public Safety, criminal history checks conducted by Maine State Police do not cover everything that would be included in a comprehensive background check. Civil judgments, dismissed charges, acquittals and credit history are not included in such criminal history checks, which cost $25 per person researched, McCausland said recently.

Most requests for criminal history checks, which in Maine number in the thousands each year, come from employers who want to check on the criminal backgrounds of potential employees, he said.

In another recent embezzlement case in Lamoine, a criminal history check would have paid off for a small-business owner, had she requested one.

Iva Lynne Scott, 43, of Ellsworth was convicted earlier this month in Hancock County Superior Court of embezzling $10,000 from Lamoine General Store, where she worked as a cashier. As Iva Lynne Westfall, the same woman had been convicted in 1993 in the same court of stealing $10,000 from a store in Blue Hill.

Kimberly Murphy, owner of the Lamoine store, has said she did not have state police conduct a criminal history check on Scott before she hired her.

Supervision and regulation

Warren acknowledges that, despite his poor health, he should have kept a better eye on his business financial records. Still, he is critical of the state for not doing more to help protect small-business owners like himself who need outside bookkeeping help.

He said there should be more regulatory oversight of people who are hired by small businesses to help keep the company books and to issue checks on the company’s behalf.

“Most [victims] do not want to [press charges] because the amount is too small and because of the embarrassment,” Warren said. “I don’t get embarrassed easy.”

Anne Head, director of the state Office of Licensing and Registration, said earlier this month that, according to state law, anyone can advise someone else on business matters or perform basic bookkeeping duties such as balancing a checkbook or making tax payments. Only licensed financial professionals such as certified public accountants are allowed by Maine law to promote themselves as being licensed or to issue reports on financial statements such as audits, she said.

The Maine Board of Accountancy can discipline licensed accountants for violations or questionable professional behavior, either by issuing fines or by revoking licenses, according to Head. Such disciplinary actions are considered public knowledge and are listed on the state of Maine Web site, she said.

According to Cheryl Russell, executive director of the Center for Family Business at Husson College, there are steps besides criminal history checks that small-business owners can take to help protect themselves against employee embezzlement.

Russell said Thursday that the center recommends that if small businesses hire outside bookkeeping help, they should have different people handling separate duties such as payables and deposits.

“It’s not wise to have one person doing all functions,” she said.

For small-business owners who lack accounting experience, active participation in trade associations often can help them develop financial management skills and help them check employment references, according to Russell. References for certified public accountants can be found on the Maine Society of CPAs Web site, she said, and small businesses, in any case, should require that bookkeepers have errors and omissions insurance.

“Ask to make sure they have that coverage,” Russell said.

According to Head, it likely would be an “overwhelming” task for the state to establish professional standards and regulations for people who provide bookkeeping help for small businesses. Without providing an estimate, she said “a lot” of small businesses in Maine would be affected by such an increase in the scope of professional regulation.

“My sense is that it would be huge,” Head said.

Head said her office also regulates certain professional activities such as cosmetology and pharmacy but shies away from regulating the business aspects of those activities, such as what hours a business should be open or how much they should charge for their services.

Similarly, who a company employs for whatever reason is viewed by the state more as a business decision than as a regulatory one, according to Head. It likely would not be cost-effective, for example, to hire a CPA to balance a checkbook, she said.

“You have to take responsibility as a businessperson for who you hire and what kind of responsibility you give them,” she said.