October 02, 2009 12:22 AM UTC

Details emerge in embezzlement case involving donor to Paccione, Markey, Perlmutter

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• by: BobMoore

Some more details are emerging in the case of Phyllis Stevens, the Iowa woman accused of embezzling $6 million from her employer, the insurance company Aviva USA. The story is of local interest because Stevens may have used her allegedly ill-gotten to help fund Colorado Democratic congressional candidates Angie Paccione, Betsy Markey and Ed Perlmutter, as well as a fairly substantial list of Democrats elsewhere.

A federal judge in Des Moines unsealed the criminal complaint today. An affidavit by FBI agent Kevin Kohler provides some details on how the alleged embezzlement unfolded.

One notable fact: Kohler said Stevens’ salary was about $40,000 annually. I can’t immediately locate any public information on the salary of Stevens’ spouse, Marla, but she lists her employer in Federal Election Commission documents as the LGBT Fairness Fund. Federal tax reports show that the parent organization of the LGBT Fairness Fund, One Iowa, paid a total of $63,000 to all its employees in 2007, the most recent data available. It’s safe to say that Phyllis and Marla Stevens’ combined annual income didn’t reach six figures, yet they managed to give more than $160,000 to federal candidates since 2004.

Links are on my Coloradoan blog, including a link to the complaint: http://bit.ly/LI9N1

More details below the fold.

The affidavit says Phyllis Stevens was  a compensation specialist for Aviva, responsible for processing sales commissions. In June 2004, according to the affidavit, she began making manual entries in the company’s computer system that created fictional commissions that were electronically transferred to her bank in Indiana. All told, Phylls Stevens made about 200 such payments totalling $5,987,803.37, according to the affidavit.

The political giving by Phyllis Stevens isn’t noted in the affidavit, but a review of Federal Election Commission records shows that she began making political donations in September 2004, or about three months after she allegedly begain stealing from her employer. Her first donations went to the Democratic National Committee, a total of $3,000 in September and October 2004.

Phyllis Stevens’ first donation to a candidate came on Sept. 28, 2005, when she gave $1,000 to Paccione, who was challenging Republican Rep. Marilyn Musgrave in Colorado’s 4th Congressional District. That date also marks the debut of Marla Stevens as a political donor, with a contribution of $1,000 to Paccione. Between 2005 and 2007, Phyllis and Marla Stevens gave Paccione $17,600, which was the maximum they could give over two election cycles under federal law. Paccione’s campaign refunded $6,900 in November 2007, after she decided against making a second run at Musgrave.

Phyllis and Marla Stevens then gave $9,200 to Markey during the 2008 election cycle, the maximum allowed by law. Markey unseated Musgrave in November 2008. They gave another $4,800 in March of this year for Markey’s 2010 campaign. The Markey campaign has set aside the $14,000 in donations from the Stevenses while the civil and criminal actions proceed.

Marla Stevens also has given $8,900 to Rep. Ed Perlmutter who, like Markey, has set the money aside as the courts sort through the case.

It’s probably no accident that the Stevenses began their candidate giving in Northern Colorado. They were both gay-rights activists in Iowa, and Musgrave was the bete noir of that movement. She was the primary sponsor of the Federal Marriage Amendment, which would define marriage as being between a man and a woman. Musgrave was a main target for gay-rights groups in the 2004, 2006 and 2008 elections.

According to Kohler’s affidavit, Phyllis Stevens’ alleged scheme began to unravel on Sept. 22, when an Aviva employee in Topeka, Kan., spotted a $62,112.75 commission on a policy that had recently lapsed. The commission was multiples of the premiums paid on the policy, setting off alarms. Aviva officials quickly investigated and found that the $62,112.75 commission was among many that had wound up in Phyllis Stevens Indiana bank account. She was confronted the next day, denied wrongdoing and was placed on paid leave. Aviva contacted the FBI on Sept. 24.

By the time the FBI was called in, Phyllis Stevens was cabbing around Indianapolis trying to withdraw money from her account at National City Bank, according to the affidavit. She tried to withdraw $170,000 late in the afternoon on Sept. 23, but the branch didn’t have that kind of cash on hand so gave her $5,000 in cash and the balance in an official bank check. The next morning she went to another branch, which was able to give her $11,000 in cash and the balance in an offical bank check.

She then went to a third branch, where the manager told her that the bank would need to place a cash order for that amount of money and she could return the following day for the cash. Phyllis Stevens told the branch manager that “she was trying to obtain as much cash and traveler’s checks as possible because she and her partner were planning to travel to Germany,” according to Kohler’s affidavit. She left that branch after obtaining an unspecified amount of additional cash.

Late in the afternoon of Sept. 24, Stevens went to a fourth branch, where she deposited the official check into her account. The account currently has a balance of $123,000, according to the affidavit.

Stevens was arrested the next day in Las Vegas.