News and Press Releases

United States Attorney Jenny A. Durkan
Western District of Washington

Woman Who Embezzled Nearly $1 Million From Company Sentenced To Four Years In Prison

Company Had to Lay off Workers as Executive Secretly Stole Profits

FOR IMMEDIATE RELEASE
October 31, 2011

            SARAH JANE JOHNSON, 42, formerly of Redmond, Washington, was sentenced today in U.S. District Court in Seattle to four years in prison, three years of supervised release and $811,379 in restitution for wire fraud.  JOHNSON, the former head of Human Resources at Driessen Services, Inc., stole nearly a million dollars from the company by using the payroll system to direct payments to former employees to her own bank accounts.  Not only did JOHNSON cause the company significant losses, she harmed the former employees by making it appear that they owed additional income taxes.  Her theft also forced the company to lay off additional employees and freeze pay for other employees.  At sentencing U.S. District Judge James L. Robart said, “There is simply no justification for this (crime), the opportunity was there and the defendant took it.”

            According to records in the case, JOHNSON was hired by Driessen in 2002.  The company designs and makes equipment for airplane galleys.  In 2005, JOHNSON was made head of the human resources department.  In this role, JOHNSON had sole access to the company’s payroll system.  She was responsible for terminating employees from the system when they left the company.  Beginning in 2005, JOHNSON undertook a scheme that kept former employees on the payroll system for a period of time after they had left the company.  She then changed the direct deposit information for these former employees to one of nine bank accounts controlled by JOHNSON.  In all over five years, JOHNSON fraudulently directed $986,481 in payroll from Driessen.  Approximately $715,000 was for her own use, and another $250,000 was paid in state and federal taxes on the fraudulent payroll.  JOHNSON left the company in March 2010, for reasons unrelated to the fraud.  After her departure, the fraud was uncovered.  The company discovered that JOHNSON’s fraud resulted in half the company’s losses in 2007 and 2009.  The company finally became profitable after JOHNSON left.

            JOHNSON’s fraud damaged individuals as well.  As prosecutors wrote in their sentencing memo, “The employees whose identity Johnson used also suffered greatly.  Many received notices from the Internal Revenue Service that they owed tax, given the discrepancy between the amount they thought they had earned, and the inflated amount in earnings reported to the Internal Revenue Service.   Other employees were denied unemployment benefits and similar benefits because the state believed that the employees were still employed, given that they appeared on Driessen’s payroll records.”

            The case was investigated by the United States Secret Service. The case was prosecuted by Assistant United States Attorney Thomas Woods.

 

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