A Centreville woman could face up to two decades in prison for embezzling thousands of dollars from the Herndon-based farmers’ cooperative where she worked.
Paula Sue Leventhal, 64, pleaded guilty in federal court on Wednesday (Feb. 19) to wire fraud after she redirected $550,000 from the cooperative to her personal bank accounts, the U.S. Attorney’s Office for the Eastern District of Virginia announced.
The cooperative’s name isn’t mentioned in court documents, which only identify it as “Company 1,” but a U.S. Department of Agriculture directory links Leventhal to the Maryland and Virginia Milk Producers Cooperative Association, which is headquartered at 13921 Park Center Road in the Frying Pan area just east of Dulles International Airport.
Started by a group of dairy farmers in 1920, the farmer-owned co-op now consists of more than 900 dairy farms across 11 states that sell milk and other products under the brand Maola. The organization has five dairy processing plants that can process over 3 billion pounds of milk, according to its website.
The co-op didn’t respond to a request for comment by press time.
According to court documents, Leventhal worked for the co-op as a chief executive secretary to its CEO, a position that gave her control of several company credit cards intended to pay for travel arrangements and other business expenses.
Leventhal used the credit cards to send money to her own bank accounts through the point-of-sales platform Square, the Department of Justice said in a press release:
On Nov. 30, 2015, Leventhal created a merchant account on Square, a point-of-sale platform that small businesses and other merchants can use to accept credit and debit card payments. Square allows users to change the name of the merchant account that appears to the customer when making a payment.
From December 2015 through July 2022, Leventhal used cooperative-issued credit cards to send money to herself via Square by charging fraudulent transactions. Leventhal disguised the transactions by changing the merchant name associated with her Square account so the charges would appear as cooperative-authorized business expenses in bank statements. Leventhal often changed the merchant name associated with her Square account to mimic travel providers and other seemingly authorized businesses.
Between Dec. 14, 2015 and July 6, 2022, Leventhal fraudulently charged the co-op’s credit cards 506 times, stealing $550,000 that was transferred to her bank accounts in 373 increments, according to a statement of facts filed by prosecutors.
The embezzlement amounted to wire fraud, because the transactions crossed state lines between a computer Leventhal had in Reston and Square’s servers in California, the statement says. The co-op, identified in co was charged $5,000 in fees for the transfers.
“Leventhal disguised the transaction so that it appeared legitimate to Company 1, when in fact Leventhal knowingly and intentionally conducted the transaction to transfer Compnay 1 funds to her personal Square account,” the statement said. “Leventhal then transferred the misappropriated funds from her Square account to her personal bank account. No portion of the $5,000 was used for legitimate business purposes.”
According to a plea agreement, Leventhal’s guilty plea came with an admission that she “is in fact guilty of the charged offense” and that prosecutors had sufficient evidence to prove guilt beyond a reasonable doubt.
Scheduled for sentencing on May 20, Leventhal faces a maximum sentence of 20 years in prison, but prosecutors will recommend a lower penalty. As part of the plea agreement, she will also pay restitution for the full $550,000 to the co-op.
Photo via Daniel Quiceno M on Unsplash
