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PORT ORCHARD — A woman sentenced Jan. 23 to six years in prison for stealing $1.1 million from her Kingston employer was accused of living the lifestyle of a reality TV star at the expense of the trust her bosses placed in her to keep the books.
The massive theft perpetrated by Tracy Ann Hatch, 47, of Silverdale, is said to be the largest embezzlement case prosecuted in Kitsap County. Prosecutors allege she frittered away the money she stole from Orca Surgical Inc., which provides skincare and medical products for foreign and domestic markets.
“She literally threw away the majority of the money that she stole from them,” Deputy Prosecutor Barbara Dennis wrote in court documents, saying Hatch spent thousands on online games every month.
However, the attorney for Hatch said the woman suffers from a mental illness and was essentially at the mercy of her drug-using, high-living sons.
And while she was ultimately responsible for the thefts, she did so in the misguided belief that she was keeping her sons from committing more crimes in service of their drug addictions and penchant for high-end luxury items.
Hatch also lived in fear of her sons’ violent tempers, said her attorney, Michael Austin Stewart, of Tacoma. Hatch was diagnosed with dependent personality disorder, chronic depressive disorder and anxiety disorder, according to documents.
Hatch’s mental illness allowed her to justify the thefts, Stewart said, as in her mind she was trying to protect her sons and herself.
“Someone with dependent personality disorder does not stand up to the bullying of another, they cave to it,” he said.
He said that Hatch has acknowledged what she has done and, even after her prison sentence is complete, likely will be paying restitution the rest of her life.
“She is devastated by her actions and has deep remorse for the harm she has caused,” Stewart wrote in court documents.
Stewart said Hatch had turned over her credit cards to her sons, now 19 and 24, and used the company’s checks to pay off her monthly balance. The thefts began in July 2011 and continued through December 2015, when they were discovered. The total Hatch is suspected of stealing is $1,075,900, with $570,000 being taken in 2015 alone.
“Tracy feared that (the two sons) would resort to selling drugs, stealing or other criminal endeavors, to include violence towards others and herself, to support their drug addictions,” Stewart wrote in court documents. “It is ironic in that it is the genesis of her criminal behavior, which is an anomaly in an otherwise spotless life of working and caring for others.”
Among the items purchased were a Rolex watch and a $6,000 pair of sneakers. Stewart said in addition to cash advances on the credit cards, the sons traded the items to drug dealers.
“Once you cross that line there really is no going back. How do you stop that?” Stewart said. “In essence, you have fed the monsters you are trying to appease.”
Dennis, who wrote that it is the largest embezzlement case prosecuted in Kitsap, rejected that argument in her sentencing memo, saying Hatch was attempting to blame her sons for her thefts. However, Dennis conceded that well over $100,000 was spent on drugs for the sons. The sons have not been charged in connection with the thefts.
In court documents, Dennis called the thefts and profligate spending the “most flagrant, disgraceful, obscenely wasteful demonstration of financial irresponsibility” she had ever seen and compared Hatch’s lifestyle to reality TV stars.
“As time went on, her tastes got more elite and higher end,” Dennis wrote. “One can see a shift from Eddie Bauer, Macy’s, Fred Meyer Jewelers to Louis Vuitton, Barney’s of New York, Gucci, Zales and the like.”
Stewart alleged that those purchases were made by the sons and that although Hatch did spend money on typical items and grooming services — along with a $12,000 home security system Stewart said was meant to protect her from her sons — the major purchases were not the kinds of things a middle-age woman would be interested in, such as clothes bearing rapper Kanye West’s label.
Dennis was unpersuaded, and in documents wrote that Hatch made the purchases to fund an extravagant lifestyle few could afford.
“One may not think the Kardashians of the world should be famous and living the lifestyles they do, but at least they didn’t sneak into someone’s heart and then under someone’s nose and into that someone’s wallet without permission,” Dennis wrote in a sentencing memo. “At least the Kardashians are entitled to the money they spend on their lavish lifestyles. All Tracy Hatch is entitled to now is to a prison cell.”
Hatch was hired by the company in 1998 and fired in 2015 when the thefts were discovered. She pleaded guilty to three counts of first-degree theft and a count of second-degree theft. Each count had aggravators for major economic offenses and for Hatch committing the crimes while being in a position a trust.
Orca Surgical is a small, family business and although it employees six people, Hatch’s thefts came at a time while the company was growing.
“As a result of Tracy’s crimes, we were not able to fully realize the fruits of all our hard work,” President Eric Hanson wrote in court documents.
Hanson wrote that aside from the financial loss, which the company was not insured against, and the betrayal of a person they trusted, the theft resulted in damage to its reputation in the community and with suppliers.
It also amounted to a loss to employees, who had to delay retirement and come to terms with the fact that the reward of their hard work had been squandered.
“The stolen funds would have covered larger raises, yearly bonus and retirement contributions,” Hanson wrote. “Tracy worked with these employees, attended company functions with them and shared their lives, all the while stealing from their financial future.”
An email message sent to the company Thursday was not returned.
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