Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: FRIDAY, August 12, 1994 TAG: 9408120109
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: LAURENCE HAMMACK STAFF WRITER
DATELINE: LENGTH: Medium
The money was not a gift, a FBI agent testified Thursday, but rather part of at least $1.5 million embezzled from the trust account of Lucy Pannill Sale, a generous textile heiress, to finance the lavish lifestyle of a banker who handled her account.
Susan F. Stone, a former trust administrator with Piedmont Trust Bank in Martinsville, and two other bank executives were charged last month in connection with one of the largest embezzlements in Virginia history.
The first person to go to court in the case, former trust officer Robert H. Dunn, pleaded guilty Thursday to a charge of misprision of a felony, or failing to report Stone's illegal actions.
FBI Agent David Frey testified that Stone wrote a $60,000 check from Sale's account to Dunn's daughter for the purchase of a home in Myrtle Beach, S.C. Stone has told authorities she wrote the check at Dunn's request.
Dunn went to Stone in 1989 and told her "in effect, the next time Mrs. Sale was giving away money, maybe his daughter could get some," Frey testified in U.S. District Court in Roanoke.
Stone then proceeded to give away a small part of Sale's fortune to someone she hardly knew, having to ask what Dunn's daughter's full name was before she wrote the check, Frey testified.
Federal authorities allege that Stone wrote that check and many like it for gifts to herself and others that were never approved by Sale. In a deposition earlier this year, Sale said she did not recall approving the gift to Dunn's daughter, Frey said.
Dunn, 67, faces up to three years in prison but is more likely to receive probation, his attorney said, for what appears to be a relatively minor role in the scheme.
Defense attorney John Edwards of Roanoke said Dunn knew of the gift to his daughter in 1989 but did not discover that it was made illegally until 1993. Edwards also has said Dunn did not solicit the check for his daughter.
Stone, who is scheduled to plead guilty later this month, is suspected of stealing up to $5 million from Sale, who officials said loved and trusted her like a daughter. Assistant U.S. Attorney Jennie Waering has said Stone used Sale's money to buy a South Carolina beach house, a Florida home, numerous expensive cars, jewelry and collectibles and to remodel her home in the Horsepasture community of Henry County.
Stone managed Sale's money for years and became a friend to the elderly woman. The widow, now 86, often sent Stone to bestow anonymous gifts in Martinsville.
Sale is the daughter of Pannill Knitting Co. founder William Pannill and the widow of E.A. "Mike" Sale, the first president of Sale Knitting Co. Pannill has been sold to Sara Lee Knit Products, and Sale Knitting has become Tultex Corp.
In a plea agreement, Stone admits to taking no more than $1.5 million, although federal authorities say the amount actually embezzled was higher. In a claim to its insurance company, the bank reported its loss at $5.5 million, which includes interest that would have accumulated if the money had not been taken.
Although Dunn pleaded guilty Thursday, Judge Sam Wilson did not officially convict him. Wilson said he "conditionally accepted" the plea and would take final action at a sentencing hearing, scheduled for Oct. 5.
by CNB