Michael Horne
Plenty of Horne

Prison Time Sought for Embezzler Andy Bandy

By - May 3rd, 2007 12:00 pm
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[Updated Thursday, January 17th, 2008 — Andrew Bandy was sentenced to 15 months in prison and 5 years probation this morning. — Ed.]

[Updated October 26th, 2007]
A Note from the Editor:

[A confessed embezzler named Andrew Bandy was to have been sentenced at 10:30 a.m. on Thursday, August 2nd 2007, in the courtroom of Hon. Lynn Adelman, of the United States District Court for the Eastern District of Wisconsin, 517 E. Wisconsin Avenue, Milwaukee. However, on July 31st, 2007, the judge ordered the sentencing hearing to be converted into a status hearing. At that hearing, which lasted two minutes, the court ordered another status hearing for Wednesday, October 3rd, 2007 at 1:30 p.m. (See the Milwaukeeworld August 9th posting here.)

At the status hearing on October 3rd, 2007, a Superseding Indictment filed October 2nd, 2007 was issued in place of the original indictment. At that time a hearing was scheduled for Monday, October 15th, 2007 at 10:30 a.m. for the purpose of hearing a plea to the charges in the new indictment. The only significant change in the indictment is the addition of Lincoln State Bank as one of the banks Bandy used in his fraud. The charges remain the same, the amount of $240,000 as Bandy’s proceeds remains the same.

At the court event on October 15th, Bandy pleaded Guilty to the new charges. He is scheduled to be sentenced on January 17th, 2008 at 10:30 a.m. in Room 390 of the Federal Courthouse in Milwaukee.

The sentencing date, postponed for the fifth time, had previously been set for October 3rd, August 2nd, June 18th, May 29th, and before that on Friday, May 11th. — Ed.]

[See article about the postponement by Sean Ryan of The Daily Reporter, June 20th, 2007 edition. –Ed.]

Bandy reached a plea agreement with the court in February in which he admitted to embezzling $222,148.89 from Mallory Properties, where he worked as property manager at the family-owned business. He now claims to have only stolen $176,000, and that he never stole from previous employers. The facts indicate otherwise.

Although embezzlement is estimated to cost American employers about $6 billion a year, few embezzlers are prosecuted. The usual reason for failure to prosecute is the victim’s fear of embarrassment. Also, embezzlers tend to be “charmers” who had been considered “personal friends” of the victims. According to one source, an embezzler who is caught and prosecuted likely had been caught – butnot prosecuted – by four previous employers. Bandy matches these descriptions.

Picked the Wrong Firm to Steal From

Frank Giuffre and his brother Dominic Giuffre, are the owners of Mallory Properties, a Milwaukee-based buyer and developer of distressed industrial real estate, with over 2 million square feet of property in its inventory. The brothers did not let fear of embarrassment deter them from seeing that Bandy was prosecuted.

And now they have asked the judge to see that Bandy does time for his crime. In their victim’s statement, the Giuffre brothers say they are “in the unfortunate position of being obliged to insist that Andy Bandy be sentenced to prison so that he may not perpetuate his schemes on other innocent victims.” They also contend that Bandy has broken the conditions of the plea agreement by his actions since arrest.

False Invoices Led to Real Money

According to the indictment in United States of America v. Andrew R. Bandy, Case No. 06-CR-257, dated October 11th, 2006, Bandy’s scheme operated from approximately April 2003 to approximately August 2005, employing the “false invoice” method, one of the most common embezzlement techniques.

The government charged that Bandy created a number of companies and controlled their bank accounts, including one for Click LLC, at Tri City National Bank, another for A. Property Management [APM] at the same bank, and one for Advanced Contracting at Guaranty Bank.

These firms would bill Mallory for alleged work, and the money, duly laundered, would wind up in Bandy’s personal accounts.

The scheme was eventually uncovered, in August 2005, but only after Bandy had been accepted as a near-family member by the Giuffres. He was immediately fired, and the Giuffres vowed to never let him steal from others again.

Sensing that “nobody steals for the first time,” the Giuffres investigated Bandy’s past. True to form, he had a history of embezzlement, yet had never been prosecuted. But he would be this time.

A Secret Past

Milwaukeeworld’s investigations into Bandy’s sketchy past led to an Ann Arbor, Michigan man named Paul Saginaw, the founder of Zingerman’s Deli, which is today a flourishing and iconic business in the university city, but was a start-up when Bandy worked there as a manager.

In a telephone interview with Milwaukeeworld, Saginaw offered this statement about Bandy:

“So once again he’s embezzling. It is our firm belief, although he did not admit to it and we did not catch him at it, that he stole from us. He was a manager at Zingerman’s in the past.

“We had a deposit that went missing. We hired a detective who did an integrity interview of the entire staff – more accurate than a polygraph. We were convinced beyond any reasonable doubt that Andy Bandy stole the money.

“There was a woman he was having an affair with – he was married at the time. We believe she assisted unknowingly. Somehow he got the combination to the safe from her. We terminated both of them. He had a lawyer who claimed he would sue us for wrongful discharge. We said ‘go ahead.’ We never heard from them again.

“Several years later his wife called during a custody battle. He was working then somewhere else where they believed money was going missing. They put a camera in the office and they picked him up having intercourse with an employee there.”

Bandy at one point made his way to Kentucky, where he befriended an individual named Mark Berryman, who told Milwaukeeworld: “As you probably know, Andrew was terminated from Zingerman’s for stealing from them. Andrew was never my employee, but he took money from me under false pretenses- about $22,000 — All this while he was pretending to be a good friend, not to mention pretending to be a good father, husband and Christian.”

The Plea Agreement – Just Another Angle to be Worked?

When charged in October, Bandy pled not guilty to the four-count indictment brought by the government. But on February 5th, 2007, he changed his plea to guilty to one count of bank fraud. As part of his plea agreement, the government dropped the three remaining charges, for which he could have been sentenced, in total, to 30 years imprisonment, $1 million fine, 5 years’ supervised release, and $100 special assessment. The parties worked out sentencing guidelines calculations according to federal policies as outlined in the 661 page sentencing guidelines manual. Bandy’s offense had a “base level” of seven, a 12-level increase for the amount of the loss (over $200,000) and a two level increase for “abuse of a position of trust.”

For its part, the government offered a two-level decrease for “acceptance of responsibility,” and a further one-level decrease, “but only if the defendant exhibits conduct consistent with the acceptance of responsibility.”

Instead of 30 years, Bandy would face around 30 months in prison, based on other cases with similar offense level characteristics. But he still had an angle or two to work. It may turn out he shouldn’t have bothered.

But Will the Agreement Stand?

After the plea agreement, and the filing of the Giuffres’ victim impact statement, Bandy made a request to reduce the amount of the Giuffres’ loss to $176,099.39. (Not coincidentally, this would serve to reduce his offense level by two points.) Bandy asked the court to grant him a $46,049.50 credit for some work done for Mallory by one of Bandy’s companies. Incredibly, the invoices Bandy submitted to support his claim were from Click, LLC and APM – two of the very companies Bandy had admittedly used in his scheme to steal from Mallory.

The Disappearing Tradesman

Bandy said some of the work done for Mallory was by a friend who was “a skilled worker, but not an organized businessperson. … I agreed to deposit checks [for the work] into my Click, LLC business account because he was staying in Milwaukee and his bank was in Kenosha. Soon after receiving some of the down payment for the job, [he] disappeared.” As a result, Bandy said he finished the work at his expense and deserved to be reimbursed by Mallory. “Total consideration for the EHIS (stucco) project: $43,250.”

“Acceptance of Responsibility”

Even more brazen than the submittal of invoices from his shell corporations in an attempt to minimize the losses he caused the Giuffres, is Bandy’s response to his former employers’ victim impact statements.

As part of the plea agreement, Bandy acknowledged that “if he violates any term of this agreement at any time, engages in any further criminal activity prior to sentencing … this agreement shall become null and void.”

After leaving Mallory, Bandy found work with Jones Lang LaSalle, an international real estate and money management firm that manages the Bank of America offices in Chicago. He has since been fired. (Jones Lang LaSalle did not respond to a request for comment.)

And what about Bandy’s “acceptance of responsibility” and promise to exhibit conduct “consistent with the acceptance of responsibility?”

He wrote the following to the court: “I understand and respect the impact my actions have caused to the victims yet respectively challenge the following point:

“I have not stolen from past employers or been terminated from previous jobs.”

It might be one thing for Bandy to say this, with a straight face, to a potential employer, but it is quite a different thing to tell it to the judge. When Paul Saginaw, the Ann Arbor deli operator, was asked to respond to the above Bandy quote, he wrote this reply:

“We believe that Mr. Bandy stole money from us and he was certainly terminated by us as a result.”

Updated May 25th, June 20th, August 9th, October 3rd, October 26th

This article was originally published by Milwaukee World.

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