Greeley Tribune recently issued the following announcement.
One of the former owners of Offen Ace Hardware spent a full day testifying Wednesday in the trial of a married couple accused of stealing hundreds of thousands of dollars from the store.
Kristi, 35, and Adam Chairez, 48, appeared before Weld Judge Vincente Vigil on Wednesday and Thursday for their joint trial.
Adam faces charges for theft of $100,000 to $1 million, a Class 3 felony punishable by up to 12 years in prison, $750,000 in fines or both, and tax evasion, a Class 5 felony punishable by up to three years in prison, $100,000 in fines or both. His wife, Kristi, was formally charged with theft in December 2018.
Owners Chris Ruth and her husband, Bill, reported their trusted employee Kristi for stealing $250,000 from Offen Ace Hardware, 1722 9th St., in 2019.
The working relationship
The Ruths met Kristi in 2004 when she worked at Taco Bell. Chris encouraged a then 17-year-old Kristi to apply to Ace Hardware, according to Chris’ testimony.
At the time, Kristi took on the role of clerk but continued to make her way up the ladder over the years. Eventually, she took over day-to-day operations, bookkeeping and management tasks after the Ruths financially assisted her in getting an accounting degree from Aims Community College in 2013.
As the Ruths began thinking of retirement, they made plans to have Kristi take over the store and put their time, energy and money into teaching her the ropes in preparation, Chris said.
Before Kristi took over, Chris said, Chris taught Kristi how to properly use the store’s funds, highlighting the funds are meant for business purposes only, which can include customer and staff appreciation. Chris explained unauthorized transactions with store funds can be someone writing checks out to themselves or a family member, paying credit cards off or purchasing personal items.
In October 2013, the Ruths retired but remained the owners. During her testimony, Chris told Weld County Deputy District Attorney Patrick Costigan she felt comfortable with her decision to bump Kristi up since the two had known each other for years and even became friends. She called Kristi intelligent on multiple occasions throughout her testimony.
“We really, really trusted her,” Chris said.
Defense attorney Jennifer Gersch targeted the Ruths for their relationship with Kristi while Chris testified on Wednesday. For starters, Gersch questioned Chris about allegedly harassing and making fun of Kristi for not going to college, but Chris denied this ever occurred.
Gersch also indicated Kristi was coerced into pursuing an accounting degree so she could take over the business, but Chris testified she encouraged Kristi to pursue the degree she wanted.
Gersch’s also said Kristi voluntarily left Ace Hardware for a few weeks to work at another hardware store, which Chris testified to be true, another sign of a strained relationship, according to Gersch. Chris denied accusations Gersch made about Kristi quitting because the Ruths accused her of stealing but then asked her to come back.
Trust broken
The trust formed over the years quickly faded on April 2, 2019, when the Ruths went to their long-term bank and discovered their store bank account was overdrawn significantly, according to Chris. The bank statements showed unauthorized transactions not relating to Ace Hardware in an account only Kristi had access to.
That same day, the Ruths found out records such as the previous four years of accounts payable files, invoices, employee files, bank statements, deposit slips, tax records and bills had been removed from the store.
The Ruths chose to not report the Chairezes initially because they wanted to give them a chance to explain, Chis testified. But upon confrontation, Kristi never provided answers to the missing documentation and overdrawn bank account and Adam reportedly got aggressive and stood between Kristi and Bill, according to Chris.
By April 4, Kristi had refused to disclose the passwords to the computers and accounting software to the Ruths. Chris said the store bank account was near $0, requiring the Ruths to use their personal funds to pay seven employers that week.
Surveillance footage showed Adam and another relative taking several items, over $5,000 worth, from the store and loading them into a trailer.
As a result, Chris investigated the suspicious activity and created a report of their business bank records from 2013 to 2018 to show what she believed to be unauthorized transactions. Many of the purchases had no confirmation as to what the Chairezs used the money to buy, according to Chris.
Over 700 transactions showed that money was taken out of the store account for unauthorized transactions, Chris indicated. Further transactions consisted of supporting her husband’s business, paying cellphone bills, paying off credit cards and other personal purchases.
Cross-examination brought up payments that became Kristi and Adam’s responsibility after the Ruths retired, including a new computer and a brand new paint station for Ace Hardware. Defense attorney Dana Casper questioned if those store-related payments were included in the fraud numbers.
Additionally, Casper addressed a handful of bank statements and canceled checks that made Chris determine Kristi committed the theft — three of which had Chris’ signature on them. While Casper criticized Chris for writing the checks and then also including them in the fraud accusations against her client, Chris testified that she incorporated checks that weren’t backed up with information or documentation that showed where and on what the money was spent.
Since Adam was an employee of Ace Hardware — his wife in charge of payroll by the time he began working at the store — the defense argued they were valid because he completed maintenance work on the building and was paid for his work. However, invoices show that Adam made purchases specifically for his business, including a purchase for cement, something that Ace Hardware doesn’t sell.
Financial damage to the Ruths
Chris, while tearing up on the stand, reported Kristi stole over $250,000 from her. Because of this, Kristi and other employees involved were fired on April 5.
After assessing the damages from Chris’ investigation into the matter, police determined Kristi was responsible for a significant amount of losses, including:
- $119,769 in checks written to Kristi without an accounting entry or entries indicating the expense was for Adam’s personal business;
- $81,561 in checks and electronic payments to several credit card companies;
- $21,987 in checks entered into the accounting software as one expense, but the check was written to Kristi or her family;
- $11,059 in checks and electronic payments for Kristi’s personal expenses and purchases;
- $10,000 in register cash losses;
- $8,667 in checks written to pay Kristi’s house account;
- $5,818 in physical property losses.
The couple’s trial continues at 8:30 a.m. Friday morning in Weld District Court.
Original source can be found here.
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