The former CEO of a North Carolina manufacturer embezzled over $15 million to fund “an extravagant lifestyle” that included $500,000 in jewelry purchases and stays at pricey New York and Hawaii hotels, federal prosecutors alleged in court papers.
Taylorsville resident Donna Osowitt Steele also illegally spent $1 million on travel, $200,000 on family weddings, $100,000 on flowers and $100,000 on Gucci purchases, prosecutors say in documents filed in U.S. District Court in Statesville on Friday.
Osowitt declined to comment when reached on her cell phone Saturday. She referred the Observer to her lawyer but hung up before saying who is representing her. Court records don’t say.
Osowitt worked at Tigra USA Inc. in Hickory, CEO/president Bernd Motzer confirmed Saturday. “Currently, our only comment on former employee Donna Steele is: We are gratified that justice is being done,“ Motzer said in an email.
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Steele worked at her former company for over two decades, from 1999 until she was fired last year, court records show without identifying the company. She was made CEO around 2015.
Tigra makes equipment for the metalworking and woodworking industries.
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What the money was allegedly spent on
All told, authorities claim, Steele spent over $1 million on travel for herself, family and friends, and over another $1 million on entertainment related expenses.
She spent $255,000 on stays for her, family members and friends at the Plaza Hotel in New York City and $110,000 at the Ritz Carlton Kapalua in Hawaii, according to prosecutors.
Nearly $7,000 in embezzled funds paid for a trip to a Notre Dame-Virginia Tech football game, the court documents show.
Of the $500,000 spent on jewelry, $455,000 was charged to credit cards for Jewelry Exchange purchases, authorities claim.
Steele also charged approximately $197,000 to Carolina Wedding for family members’ wedding expenses, authorities said in the court papers.
Other purchases included $2,000 at luxury clothier Ted Baker and $1,800 at cosmetics retailer Sephora in New York, prosecutors said.
How the alleged scheme unfolded
Steele used four types of financial transactions to pull off what prosecutors allege in court documents was an “embezzlement scheme:” personal credit card purchases on company cards; checks; Quickbooks transactions; and wire transfers.
She opened bank accounts and credit cards in the name of her unsuspecting company and limited communication between employees and the company owners, prosecutors said in court papers. Steele also told employees that “the owners were to be feared and they should be scared to communicate with them and/or should be careful around them,” according to a court filing.
Prosecutors said Steele falsely told workers that the company was having financial troubles because its parent company was taking money from its accounts. She made employees give her their passwords to all company systems, including email, so she could monitor and access to their accounts, court records show.
And Steele used her position to respond to credit card companies when they flagged questionable purchases, according to court documents. “Yes these are okay and approved — thank you!” she’d reply, court records show.
Steele faces a wire fraud embezzlement charge, according to a bill of information filed against her. Bills of information are commonly filed when a defendant is working out a plea arrangement with U.S. prosecutors.
Steele also is accused of transferring $350,000 in embezzled funds to Opulence by Steele in Taylorsville, which federal authorities described in court documents as a high-end clothing and furniture boutique.
Impact on vendors, employees
Because of Steele’s actions, prosecutors said, vendors withheld products from the company due to late or non-payment, and customers complained about being placed on credit holds despite paying what they owed on time.
Employees weren’t paid on time, had their insurance canceled “without warning” and saw their company cards declined when they made legitimate purchases, according to court records.
Steele faces a forfeiture judgment of nearly $16.9 million, prosecutors said in court documents.
Joe Marusak has been a reporter for The Charlotte Observer since 1989 covering the people, municipalities and major news events of the region, and was a news bureau editor for the paper. He currently reports on breaking news.
