A designer embezzlement

ACI Boland Architects of Kansas City was betrayed by an office manager who, over a decade, funneled millions into secret bank accounts.

By Richard Massey
Managing Editor

A long-time office manager at one of Kansas City’s top design firms, ACI Boland Architects, recently pleaded guilty in federal court to embezzling nearly $5.3 million in a two-pronged scheme that apparently financed a lavish lifestyle outside the office.

Jane Barnes, 53, of Lee’s Summit, in early August pleaded guilty to wire fraud, bank fraud, and
aggravated identity theft in a decade-long campaign of embezzlement that saw her accumulate an extraordinary array of payments for credit cards, transfers to family members, entertainment and travel, and dining, among other expenses, even though her authorized salary could be as much as $88,900 a year with bonuses.

Employed at the firm from 1998 to her resignation in March of this year, Barnes inflated her salary with unauthorized disbursements through
payroll from 2006 to 2011, and gave herself payments through forged payroll checks from 2010 to 2016, according to the case file in U.S. District Court for the Western District of Missouri. Barnes kept five separate accounts at four different banks. She was the office manager at ACI Boland since at least 2008.

Barnes faces up to 30 years in prison and a $1-million fine on the charge of wire fraud, the most serious charge she faces, and is set to serve a two-year mandatory sentence, consecutive to any
other sentence, for aggravated identity theft, according to the August 2 plea agreement. On the charge of wire fraud, she faces up to 20 years in prison and a $250,000 fine. She will be sentenced after a presentence investigation by the U.S. Probation Office. Under the terms of the plea deal, she must forfeit $5,293,300, a 2014 Ford F-150 Crew Cab Raptor 4WD, a 2014 Ford Explorer Utility 4D Sport 4WD, and a 2013 Lincoln MKS, according to U.S. Attorney Tammy Dickinson.

According to the case file, Barnes funneled direct deposits into her accounts in the amount of $1.62 million from 2006 to 2011. Barnes also used the initials of one of the firm’s principals, M.K., on 359 forged checks she used to embezzle $3.67 million from 2010 to March 2016. While a full name is not mentioned in the court file, Michael Kautz is listed as one of the firm’s four principals on the ACI Boland website. Kautz is also listed as the chief contact for the Kansas City office, where Barnes worked.

Kautz did not respond to a request for comment, and neither did AIA Kansas City.

Dan Knise, president and CEO at Washington, D.C.-based Ames & Gough, a specialty insurance brokerage with a focus on architects, engineers, and law firms, says there’s a policy to cover the actions of people like Barnes.

“The insurance is known as employee dishonesty or crime insurance,” Knise says. “Every firm should carry this coverage.”

But for a lot of the firms with coverage, there’s a few problems.

“Many that do carry it have inadequate limits of only $25,000 to $50,000,” Knise says. “We are finding that losses can be much bigger than that. Also, the basic crime coverage included with the business owners’ insurance policy often does not include computer fraud or funds transfer fraud, which are becoming increasingly more common as the way people are stealing monies. This requires the purchase of a stand-alone crime policy.”

Over the course of the embezzlement, Barnes made off with an average of more than $481,000 a year, and in 2014, her biggest year, defrauded her firm out of an astounding $807,206, according to court documents. At $1.9 million, Barnes’ biggest payments were for credit cards. But she also spent more than $770,000 in transfers to relatives, $425,000 for shopping and travel, and another $424,000 on vehicles. She spent nearly $108,000 at restaurants and for food.

The FBI investigated the case. U.S. District Court Judge Roseann Ketchmark is presiding. Assistant U.S. Attorney Kathleen D. Mahoney is prosecuting.

This is not the first controversy to roil the Kansas City architecture industry this year. BNIM, another major firm with deep roots in the city, abandoned its plans to renovate and occupy a building in the Crossroads Arts District due to vehement opposition from school district patrons who opposed BNIM’s use of a major tax incentive to help finance the deal.

BNIM has since made arrangements to move its headquarters to the Crown Center in downtown Kansas City.

Posted in Archives | September 9th, 2016 by