Largest embezzlement in Wake history: Former Cary exec gets up to 16 years in prison
A former executive of a Cary company pleaded guilty Monday in what District Attorney Lorrin Freeman called "quite possibly the largest embezzlement case in Wake County history."
Hugh Franklin Johnson II, 44, of 10304 Rocky Ford Court in Raleigh, pleaded guilty to eight counts of obtaining property by false pretense, including six counts where the value taken was more than $100,000. He received consecutive sentences of 70 to 96 months in prison.
Johnson managed the Cary office of BMG Labtech Inc., a German firm that makes instruments used in the pharmaceutical and biotechnology industries to run analytical tests. But Wake County Assistant District Attorney Nishma Patel said Johnson also lived the high life on the company's dime, charging trips to Cancun, $25,000 birthday celebrations, lavish dinner parties at Ruth's Chris Steak House restaurants, subscriptions to wine clubs and even pornography on BMG credit cards.
"The amount of spending that it takes for an individual to completely spend nearly $6 million in six years, it's alarming," Patel said.
An outside accountant handling an unrelated matter started noticing discrepancies in bank statements in 2017, so BMG brought in a security consultant to go over bank and credit card statements line by line, Patel said. They determined Johnson altered both bank statements and entries in the company's books to cover his theft, she said.
The consultants went through expenses back to 2012 and found Johnson had looted more than $5.8 million from the company, Patel said. Officials believe the embezzlement went as far back as 2009, she said, but they stopped the laborious line-by-line review at 2012 because the volume of the theft was so large.
When it was clear he was going to be arrested, Johnson told friends he was going somewhere he wouldn't be found, Patel said. Authorities apprehended him in Halifax County near Interstate 95 and found a gun in his car, she said.
Johnson made no statement in court other than to answer questions posed by Superior Court Judge Graham Shirley.
Jury selection in his case was supposed to start Monday morning, but he agreed to plead guilty in exchange for prosecutors dropping several embezzlement charges against him.
Defense attorney George Kelly called Johnson "a nice man" and asked for a work-release sentence for him so he could begin to repay the money he took.
"Never in a million years would he walk into a bank and rob it," Kelly said. "In this case, he was given the keys to the vault. Unfortunately, he abused the trust that was given to him."
Shirley chastised Johnson for that abuse.
"Your attorney said you're a nice guy, but really, what you are is a crook. You're a thief," the judge said. "In my book, stealing from people who trust you is a far greater crime than stealing from people you don't know."
Shirley noted that, if Johnson serves the minimum sentence, every minute he spends in prison will amount to 86 cents of the total he stole from BMG.
"There was absolutely no excuse for this," he told Johnson. "You weren't stealing to pay medical expenses for a sick relative. You didn't have an addiction other than your simple greed.
"You're not going to be eating at Ruth's Chris for the next some 140 months," the judge continued. "You're going to be wondering what meat you are eating because it's not going to be the steak you dined on at Ruth's Chris on someone else's dime."
Johnson will be eligible for work release to begin repaying the $5.8 million in restitution to BMG only after he has served the first half of his sentence, Shirley ruled.
