Hemlocks Landscaping Wins Million-Dollar Judgement in Local Racketeering Suit
As written in the Pickens County Progress
Case confirms no one can be trusted, says attorney.
After a long-time employee of Hemlocks Landscaping, Inc. embezzled the company out of over a quarter-million dollars during a two-year period, owner Ross Fletcher said he learned an "expensive lesson."
So did the owner of Elements A Home Design Studio, who had almost $29,000 stolen from her after hiring the same person.
Substantial judgments were recently won by both companies in Pickens County Superior Court against Kelly Ann Reaves of Ball Ground.
Hemlocks, which was called Landmark Landscaping at the time of the theft, won awards for compensation and punitive damages of $1,004,631.75. Reaves' husband, Steve Reaves, was also named in that lawsuit.
The judgment was awarded by Judge Roger Bradley on May 24.
Ed Marger, attorney for Fletcher, said the judgment is one of the largest in Pickens County's history.
A suit brought by Elements, which became a victim of Reaves after she left her job at Hemlocks, resulted in a judgment of over $30,000 in March.
Bill Pickett, who represented Elements and its owner Michelle Castell, said Reaves "flat out stole" from the company.
But when the respective court dates arrived, the defendants made an unusual move in both cases. Picket said they were nowhere to be seen on the final day of his case. Marger said the Reaves' left the courtroom and never came back after their attorney filed a motion to withdraw as defense counsel.
Neither attorney knew if anyone has since made any subsequent contact with the defendants.
Two criminal cases are pending against Kelly Reaves in Pickens County as well. Both are multi-count theft by taking cases. One lists 30 counts in which Reaves allegedly stole from Landmark Landscaping from November 2000 to March 2003.
The other case deals with Elements, who is listed as the victim of nine counts of theft allegedly taking place between December 2003 and March 2004, when Reaves was employed there.
Hemlocks owner Fletcher said Raves had worked for him for eight years, and was a "trusted employee who became a friend to me and the other employees."
"It was a real shock when we found out," said Fletcher, noting that she almost bankrupted his company.
He said Reaves, working as the company's bookkeeper, was able to commit the theft as she had "total access and control" of Hemlocks' checking accounts and day-to-day money management.
She repeatedly wrote company checks to cash, or to her own personal bills including her mortgage and power bills. She also wrote checks to her husband's various businesses, which included contracting companies and a paint ball store that used to operate in Jasper, according to Fletcher.
Reaves then falsified weekly and monthly financial reports to make it appear to Fletcher that she was doing her job correctly. He said she even went as far as destroying records and hard drives.
Her activities were only discovered when Fletcher hired an outside accountant to help him figure out why the company had been in financial stress for several years.
Marger said the case highlights the need for small business owners to keep a close eye on all their employees.
"You need to personally check on your most valued and most trusted employees, because the most trusted ones are the ones that will steal from you," said Marger.
The case also serves as a wakeup call that white collar crimes does happen to small companies throughout the state of Georgia, Fletcher said.
Even though Fletcher acknowledges he may never see any of the award money, he was "very pleased" with the judgment.
"She damaged the company, me, and my clients, who are important to the organization as a whole," he said. "This is a legal way to say she is responsible and to hold her accountable."
He added that he holds Steve Reaves just as guilty as his wife, since he endorsed the checks that were secretly written to his companies.
Pickett said Kelly Reaves exhibited similar behavior in her employment with Elements, after she had left Landmark.
She was writing checks to herself, and recording them in the company's computer system as being paid to bill holders and creditors, Pickett said. Reaves was caught by Castell when she bounced a check.
Fletcher was entitled to triple damages in his case because it was subject to Racketeering and Corrupt Practices (RICO) statutes, said Marger.
Because it was shown the defendants had committed a series of embezzling crimes, their activities were classified as racketeering, according to the judgment which was determined after the Elements case.
"RICO was originally meant for the mafia," said Marger.
Even though Reaves allegedly defrauded Elements after ripping off Landmark, the Elements case was heard first. So no pattern of racketeering had yet been established, and Castell could only win actual damages and attorney fees, Pickett explained.
Fletcher said since being a victim of fraud he has undertaken a simple set of procedures that every business owner should practice to avoid employee fraud.
These include personally opening all the mail; paying attention to bank statements; verifying that your signature is on every cancelled check; verifying accounts receivable and matching up accounts payable to the company's bills; and periodically ensuring that checks make it into the company's accounts.
Fletcher said he also hires a business consultant to come in once a month to help verify the books are being kept soundly.
