Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, July 16, 1994 TAG: 9407290039
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: By MICHAEL STOWE STAFF WRITER NOTE: above
DATELINE: LENGTH: Long
Susan F. Stone, a former trust officer with Piedmont Trust Bank, has agreed to plead guilty to making false statements in Piedmont Trust's books and misapplying bank funds, Assistant U.S. Attorney Jennie Waering said.
The plea agreement was reached more than a year ago, shortly after FBI agents searched Stone's bank office and home looking for evidence linking her to the disappearance of millions of dollars from the accounts of Lucy Pannill Sale. Waering said the U.S. attorney's office postponed announcing it because prosecutors were developing the case and trying to recover assets from Stone.
Stone faces up to 30 years in prison and a $1 million fine, but attorneys for the government said the punishment will probably be much lighter. Waering estimated Stone's prison sentence would range from about two to six years and the fine would be less than $100,000.
Robert H. Dunn Jr. and Thomas W Turner, two other former trust officers at the bank, were charged in connection with the swindling scheme Friday, but their alleged roles appear minor compared to Stone's.
Stone, 44, was trust administrator for Sale, the daughter of Pannill Knitting Co. founder William Pannill and the widow of E.A. Sale, former president of Sale Knitting Co.
An FBI affidavit originally alleged that $1.5 million was missing from Sale's accounts. But in a claim to its insurance company, the bank reported its loss at $5.5 million, making it one of the largest embezzlements in Virginia history.
Leon "Chip" Lackey, a vice president with the bank, said the $5.5 million insurance claim included interest that would have accumulated if the money hadn't been taken.
Stone began taking money from the bank in 1985, Waering said, but it was not discovered by bank executives until about 18 months ago.
Federal authorities said Stone used the money to lead a lavish lifestyle well beyond the means of her $42,000-a-year salary.
Waering said Stone used money from Sale's accounts to purchase a South Carolina beach house, a Florida home, numerous automobiles, jewelry and collectibles and to remodel her home in the Horsepasture community of Henry County.
An FBI affidavit unsealed before Thursday's announcement reveals some of the details.
Items purchased with money from the accounts include:
$517,806 home in Garden City, S.C.
$67,700 mobile home at Ocean Lakes Campground in Myrtle Beach, S.C.
$16,352 1993 Mazda 626.
$26,150 Dodge Stealth.
$46,900 1988 XJS-convertible Jaguar.
The FBI affidavit said Stone spent $34,148 of Sale's money on the Jaguar and traded a 1975 Mercedes for the difference.
In June 1992, Stone paid $281,126 for a home in Tampa Bay, Fla., that she gave to her daughter Betsy, according to court records. Sale told FBI agents that she and Stone had discussed purchasing a home for Betsy Stone, but that she never would have authorized that much money.
Stone also wrote checks for more than $80,000 to furnish and renovate the Florida home.
The affidavit says Stone bought hundreds of thousands of dollars of stock in companies like Disney, Philip Morris and Ford Motor Co.
Stone also lent $79,500 to a married couple she knew so they could buy a house in Collinsville. The deed of trust listed Stone and her husband, Harry, as the beneficiaries of the note.
The former trust officer also gave money to several churches, including $375,000 to the Horsepasture Christian Church she attends. All of the churches except Horsepasture Christian have returned the money to the bank.
The bank has filed suit asking the church to return the money, Lackey said, and the church has indicated it will return the money if Stone is convicted.
The good life is over for the Stone family, at least for now.
Nearly everything they own, including their Henry County home, has been forfeited to the bank.
Stone's attorney, Marshall Mundy, said the family is staying with relatives in the Martinsville area.
"Susan and her family must virtually start over, emotionally and financially," said a statement from the attorney.
Mundy termed Stone's alleged crime "a tragic mistake, one that will haunt her for a very long time."
Stone, a 23-year bank veteran who was fired shortly after the money was discovered to be missing, had managed Sale's accounts for years.
Joe Cobbe, Sale's accountant, said earlier this month that Stone was like a family member to the 86-year-old woman. She often would ask Stone to bestow anonymous gifts on charities and other causes.
Stone tried to cover up her embezzling by asking Sale to sign forms saying the money was a gift, according to court records.
Even after she found out Stone was stealing from her, Sale said she didn't want her former friend to go to prison.
In her plea agreement, Stone admits to taking no more than $1.5 million, though federal authorities say the amount actually embezzled is higher.
Mundy said Stone has fully cooperated with federal authorities since last May and that she's glad the matter is nearly resolved.
The attorney said Stone is "a kind, caring, compassionate and loyal person" who has been "villainized" by the media in the past year.
Stone is well-known in the Martinsville area, having served on several nonprofit agencies and having made an unsuccessful campaign in 1985 for clerk of the court in Henry County.
Like Stone, the two other trust officers charged in the case left the bank last year.
Turner, 70, a former senior vice president in the bank's trust department, has agreed to plead guilty to one count of misappropriating bank funds, Waering said.
Waering said that in October 1988, Turner asked Stone to ask Sale for a $90,000 loan. In order to conceal the loan, he requested the check be made to his ex-wife, who then gave him the money.
Dunn, 67, has agreed to plead guilty to misprision of felony, which means he had knowledge of a felony but failed to report it promptly.
On May 1, 1989, Stone wrote a $60,000 check from Sale's account and gave it to Dunn's daughter so she could buy a house in South Carolina. Waering said Dunn was informed of the gift but failed to report it.
John Edwards, Dunn's attorney, said his client did not solicit the gift for his daughter, but that the suggestion came from Stone.
Edwards said Dunn thought Sale had authorized the gift.
R. Bruce Valley, president and CEO at Piedmont, said the bank is relieved that the investigation is finally complete.
``I must point out that the bank, along with our valued customer, has been the victim in this case,'' he said. ``Now we are putting this matter behind us and looking forward to the future with high expectations.''
by CNB