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Guilty plea in $1.5 million Decipher embezzlement suit

March 11th, 2009: Allan Sugarbaker says...
Guilty plea in $1.5 million Decipher embezzlement suit

A few years ago, Decipher was one of the major game publishers in the industry, giving Wizards of the Coast a run for its money. Time went on, and several factors, including the company’s loss of the Star Wars CCG license back in 2002 led to Decipher being a much smaller presence in the game industry. Fans may remember another reason Decipher had troubles was embezzlement, to the tune of $1.5 million, which was stolen from the company over a nine year period by Decipher’s former vice president of finance, Rick Eddleman, brother-in-law to Decipher founder Warren Holland. Yesterday, Eddleman pleaded guilty in Circuit Court to 12 counts of embezzlement. He faces a maximum sentence of 12 years, and will be sentenced in June. The full newspaper story is below.

Virginian-Pilot news story follows:

Norfolk man pleads guilty to embezzling more than $1.5m

By Michelle Washington
The Virginian-Pilot
© March 10, 2009
NORFOLK

As vice president of finance for Decipher Inc., Rick Eddleman controlled every aspect of the company’s money.

His brother-in-law, Warren Holland, had founded the Norfolk-based company in 1983. It quickly took off, producing and selling a line of collectible and role-playing card games such as “How to Host a Murder,” “Lord of the Rings” and “Star Wars.”

Holland hired Eddleman to work part time on Decipher’s computer systems. By the end of 1992, Holland asked Eddleman to become vice president of finances for the company.

Prosecutors say Eddleman embezzled more than $1.5 million from the company over nine years.

Eddleman pleaded guilty in Circuit Court on Monday to 12 counts of embezzlement. He faces a maximum sentence of 12 years under the terms of his plea agreement when sentenced in June.

In a summary of evidence submitted to the court, prosecutor Marc West said Eddleman paid himself double his salary. He wrote checks to himself as personal loans and convinced other staffers that he paid back the money.

“Through these two methods alone the defendant embezzled over $500,000 from Decipher,” West wrote.

Eddleman also wrote checks worth $41,000 to his wife and children, forged their signatures, and deposited the money into his personal account. Eddleman reviewed the company’s credit card statements, West wrote, enabling him to hide $530,000 of his own charges.

In 2000, Decipher hired an accountant who discovered Eddleman had placed $120,000 in an account and had other unexplained payments to himself.

Eddleman admitted to Decipher’s president, Cindy Thornburg, that he had “borrowed” the money, and told her that $120,000 was all he had taken.

“Believing this to be the truth, Mr. Holland allowed the defendant to resign from Decipher in lieu of being fired,” West wrote.

Decipher sued Eddleman. As lawyers obtained information for the case, Eddleman admitted embezzling $326,000 through personal charges on a company credit card and $529,000 through check-writing schemes.

In settlement papers filed in March 2008, a judge ordered Eddleman to pay $8.9 million.

Thornburg said Monday that the company wrote off $8.9 million in losses it discovered after Eddleman’s departure. The losses contributed to the company’s decision to lay off more than 90 employees, Thornburg said.

J. Bradley Reaves, Decipher’s lawyer in the lawsuit, said Eddleman had little money in his accounts. He turned over about $50,000 from a 401(k), Reaves said. Otherwise, it was hard to know where the money went.

“That’s a good question,” Reaves said. “Three hundred at a restaurant here, $300 at a restaurant there, golf, expensive items there wouldn’t be any money left over from.”

Michelle Washington, (757) 446-2287, michelle.washington@pilotonline.com

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