A Palm Beach County clerk took advantage of lax accounting — and the traditional way exotic dancers collect their earnings — to embezzle more than $25,000, the county’s Inspector General said Tuesday.
The investigation found that Pedemey took an additional $4,605 from the county’s victim services fund, much of that money coming from criminals who get the option to donate in lieu of community service. At least $1,300 of that was cash, the report said.
Pedemey resigned Dec. 8, and the report said the county might try to recover some of the more than $30,000 taken from the two departments.
The case also has been referred to the Palm Beach County State Attorney for possible felony charges. That office said Tuesday it had no comment. The inspector general’s report said the alleged acts would be second-degree felonies, punishable by up to 15 years in prison and a $10,000 fine.
The adult dancers’ fees were especially vulnerable because dancers are in a cash business and typically paid in cash, where others usually use either checks or credit cards to get a driver license or other ID. More than 70 percent of the fees paid for the adult dancer ID cards was in cash.
“That was the biggest recommendation we made,” Inspector General John Carey said Tuesday. “It’s usually best not to deal in cash.”
Because so many transactions were done in cash, Carey said, the actual amount stolen might be “much more than that.”
The report said the Public Safety Department has since agreed to no longer accept cash for adult entertainment IDs. And the victim services division has beefed up its record keeping.
Messages left at phone numbers listed for Pedemey in Greenacres were not returned. Pedemey, 54 had been hired by the county in February 1999 and earned about $54,000 annually, according to county records.
The county identification program, which began in 1998, is meant to keep underage girls from working in strip clubs. More than 9,000 adult entertainers, almost all women, have been registered so far for the lifetime IDs. In 2008, the fee was increased from $25 to $75.
About a year ago, the inspector general’s report said, a co-worker of Pedemey’s grew suspicious after she’d see someone buy an ID one day but didn’t see the money in the following day’s report. Eventually, supervisors began to cross-check and found discrepancies.
On Nov. 16, a weeping Pedemey came to Public Safety Director Stephanie Sejnoha and to Marianela Diaz, the department’s finance director, and confessed to the embezzlement, according to the inspector general’s report. Pedemey told the supervisors she “knew it was wrong” and “she was sorry” and that her husband had been “spending a lot of money at Home Depot.”
The report said Sejnoha initially estimated Pedemey had stolen at least $7,000 in the previous six months but perhaps a lot more. Cross-checks later concluded that, going back to October 2013, Pedemey had falsified daily logs to steal at least $27,575, the report said. Pedemey explained to supervisors she would manipulate the department’s accounting software to low-ball the money collected. Pedemey and another worker were the only two who handled the money.
A county software coordinator told the Inspector General that when the department bought the third-party accounting software more than a decade ago, he had told officials it was unsafe and had no cross-checking capability or a system to track who used it by user names and passwords.
At the time of the November confession, the report said, Sejnoha placed Pedemey on leave in advance of a termination hearing and reported the theft to the Inspector General’s Office, which also alerted the Palm Beach County State Attorney’s public corruption unit. That unit agreed to the Inspector General doing the initial investigation. Because of the potential for criminal charges, the Inspector General did not interview Pedemey.
In the victim services theft, the report said, the Inspector General learned the accounting for tracking victim services donations was inadequate and many files showing donations had not been retained. The county’s victim services department has since put a procedure in place that uses a numbered receipt book, and an armored car vendor now collects money directly from victim services.
Sejnoha said Tuesday she did not want to comment beyond what’s in the report.