Former Bank Employee Karen Baer Pleads Guilty to Bank Fraud

Admits She Stole at Least $400,000 From the Bank Where She Worked

July 7, 2008

Baltimore, Maryland - Karen L. Baer, age 46, of Westminster, Maryland, pleaded guilty today to bank fraud in connection with a scheme to steal at least $400,000 from the bank where she worked, announced United States Attorney for the District of Maryland Rod J. Rosenstein. The government alleges that Baer stole more than $1 million in the course of her scheme. The loss amount will be resolved by the judge at the sentencing hearing.

“Financial institutions need to rely on the integrity of their employees. As this case demonstrates, people who embezzle from their employers can be caught by careful auditors and held accountable by criminal prosecution,” said U.S. Attorney Rod J. Rosenstein.

According to her guilty plea, from 1998 until her termination on October 25, 2007, Baer was a teller at PNC Bank or one of its predecessors, Westminster Union Bank and Mercantile Bank. She was the teller supervisor of the 140 Village Shopping Center branch at the time of her termination. Beginning in June 2002, Baer defrauded her employer by removing cash from the 140 Village branch, usually $10,000 at a time. To conceal her thefts, Baer made false entries in a “Due from Mercantile” account, creating false debit and credit tickets purporting to reflect cash shipments sent from the 140 Village branch to the Federal Reserve, and cash shipments received by the 140 Village branch from the Federal Reserve, when in fact no such cash shipments were made. Baer made at least several hundred suspect debits and corresponding credits to make her initial theft difficult to detect and to hide additional thefts. In the course of her scheme, the running total of debits and credits grew to $1,050,000.

Baer’s conduct was uncovered when PNC began an audit in September 2007 in connection with its acquisition of Mercantile. PNC’s auditors discovered $1,050,000 in unaccounted funds. Further investigation revealed the pattern of suspect debit and credit tickets signed by Baer. In October 2007 when a PNC investigator confronted Baer concerning these allegations, she admitted that she had been stealing money from the bank since 2002. She advised FBI agents in subsequent interviews that she removed $10,000 from her teller drawer on at least a monthly basis, which she took for herself. She claimed that she used the stolen funds for living expenses, vacations and college tuition for her children. She also admitted that she forged another bank employee’s name on several of the credit tickets.

As part of her plea agreement, Baer agreed to forfeit her interest in a residence, nine bank accounts, a 2004 Hummer H2, a Chevrolet Corvette, several snowmobiles and all terrain vehicles.

Baer faces a maximum sentence of 30 years in prison and a $1 million fine. U.S. District Judge Andre M. Davis scheduled sentencing for October 3, 2008 at 10:00 a.m.

United States Attorney Rod J. Rosenstein thanked the Federal Bureau of Investigation for its investigative work and commended Assistant United States Attorney Jonathan Biran, who is prosecuting the case.


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