Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, August 23, 1994 TAG: 9408230101
SECTION: NATIONAL/INTERNATIONAL PAGE: A-1 EDITION: METRO
SOURCE: By MICHAEL STOWE STAFF WRITER NOTE: above
DATELINE: LENGTH: Long
FBI agent David Frey told a federal judge Monday that Stone tried to cover up her scheme by ``manipulating'' the 85-year-old Martinsville heiress she swindled out of nearly $5 million into signing letters saying the money was a gift.
For eight years, Stone enjoyed a life of expensive cars, multiple vacation homes and fine jewelry - primarily financed from money she stole from Lucy Pannill Sale, Frey said.
Sale is the daughter of Pannill Knitting Co. founder William Pannill and the widow of former Sale Knitting Co. president E.A. Sale.
Stone, a former trust officer at Piedmont Trust Bank, began managing Sale's multimillion-dollar trust accounts May 7, 1985. Five weeks later, Stone stole her first $10,000, Frey said.
Sale often sent Stone to bestow anonymous gifts on people and didn't realize Stone was using the money for her own benefit, the FBI agent said.
In January 1993, a routine bank audit found that huge amounts of money were missing from the accounts. Bank officials then confronted Stone.
That's when Stone tried to cover her tracks by asking Sale - who loved and trusted her - to send letters to Irving Groves, who then was the bank's president, approving the withdrawals.
Stone told Sale that she was getting in trouble for the method by which she was doling out the anonymous gifts.
A letter to Groves from Sale dated Jan. 30, 1993, shows the respect Sale had for Stone.
``The relationship between Susan Stone and I is a very unique one based on mutual respect, trust and love. ... It is now evident that Susan Stone has put her job in jeopardy by trying to protect me. Over the years Susan Stone has had to endure considerable gossip and speculation due to the procedure by which I accomplish my gifting program,'' the letter said. ``For anyone to question her integrity or honesty is unthinkable. No monies have ever gone in or out of my accounts without my knowledge.''
That letter didn't appease bank officials, and on Feb. 16, 1993, Stone asked Sale to sign another letter listing specific gifts Sale had given the banker.
``I'm sure you don't remember some of these things; I didn't either until I started going through my records,'' said the cover letter from Stone. ``You have been a mother to me when I had no one. Whatever the outcome is; whether I lose my job or whatever, I can truly thank God for bringing you in my life.''
Frey told U.S. District Judge Samuel Wilson that Sale signed the letters because she loved Stone, but the widow didn't realize ``the magnitude'' of the ``gifts'' Stone was taking from her accounts.
Frey said that Stone didn't even know how much money she had in her many trust accounts.
``She wasn't even able to ballpark the amount,'' he said.
Sale's exact net worth is unclear. Frey said she had made many legitimate gifts, such as $1 million to Virginia Military Institute and $1.1 million to Poplar Forest, Thomas Jefferson's home in Bedford County.
It wasn't until June 4, 1993 - after FBI agents visited Sale's South Carolina home - that Sale admitted in a letter to the bank that Stone had taken advantage of her.
About three weeks later, the ex-banker agreed with federal prosecutors to plead guilty to taking up to $1.5 million from Sale. After Stone signed the agreement, she gave the FBI documents revealing that nearly $5 million had been taken.
The embezzlement case has been in the headlines for more than a year, but Monday was Stone's first appearance in court.
In a barely audible voice, she admitted her guilt to Wilson. Moments later, she wiped tears from her cheeks.
Stone hardly resembled the fast-talking, aggressive woman that friends and former co-workers described.
The former Piedmont Trust officer sat motionless with her head slightly bowed through most of the two-hour hearing.
She rarely looked at Frey as he told Wilson how Stone had diverted funds from Sale's trust accounts into Stone's 30 different accounts in 12 banks from 1985 to 1993.
Court records show that Stone used Sale's money to buy six cars, a personal watercraft, a South Carolina vacation home, a trailer at Myrtle Beach, a house in Florida for her daughter and many stocks and bonds.
The bank has confiscated all of Stone's assets, valued at about $2 million, the federal agent said. He said Stone passed a lie detector test in December that assured federal authorities she wasn't hiding any assets.
Frey said that when Stone was first questioned by the FBI, she tried to rationalize what she had done by saying, ``what's mine was hers, and what's hers was mine.''
Finally, after several interviews, Stone admitted that she was wrong to take the money.
``I feel that I abused her generosity with me. I really don't think she would have refused any requests, and I took advantage of that,'' Stone said. ``It was easier to steal from her than to ask her for something, get what I asked for, and then feel guilty about my greed.''
Thomas Turner, former head of Piedmont's trust department, also pleaded guilty Monday to a role in the embezzling scheme. He admitted to asking Stone for a $90,000 loan from Sale's accounts and concealing it from bank officials.
Stone, 44, will be sentenced Nov. 16. Prosecutors speculate that she will be sentenced to between two and six years.
Stone's attorney, Frank Rogers, said he probably will call several character witnesses to testify on her behalf. Stone was well-known in the Martinsville area. In 1985, she ran an unsuccessful campaign for clerk of the court in Henry County.
Rogers said he thinks Sale still would agree that some of the money that prosecutors say was stolen actually was a legitimate gift. He admitted, however, that Stone had abused the woman's trust.
``There was a line,'' he said, ``and she crossed it and never went back.''
by CNB