IN THE CIRCUIT COURT FOR MONTGOMERY COUNTY, MARYLAND

STATE OF MARYLAND

V. Criminal Number: 133227

MELVINA SHIPE0 Plea Date: February 169 2018,1:30 p.in.

Judge David Boynton
DEFENDANT.

PROFFER 0F PROOF IN
SUPPORT 0F DEFENDANT'S PLEA 0F GUILTY

The State of Maryland submits the following proffer of pi.oof in support of the

defendant's plea of guilt.y to the single felony count of I/7e// Sc./2e;77e.. S/OO, COO P/i£5

Thef o Sclleme
Elem.ents Of the Off erase

The necessary elements of I/7c// Sc/7e;77e.. 6h/OO, 000 P/%£, in violation of Criminal Law

Article9 Section 7-104, each of which the State must prove beyond a reasonable doubt to sustain

a Conviction, ai.e:

(I) That the defendant willfully or knowingly obtained control over someone else's

Property.

(2) That the defendant willfully and knowingly used deception.

(3) That the defendant had the purpose of depriving the ouner of the property.

(4) That the value of the property was at least $100,000.

 Penalties for the offense

The penalty for I/7e// Sc/7c777c.. S/OO, COO P/%£ is set out in subsection (g) of Section 7-104

of the Ci.iminal Law Article. The maximum penalty is:

(1) a term of imprisonment not exceeding twenty (20) years, and, o].;

(2) afmenotexceeding$25,000,and;

(3) restoration of the propelfy taken (or the value of the property taken) to the ownei..

Factual Prof f er

lf this matter had gone to trial, the State's evidence would establish the following facts

beyond a reasonable doubt.

Melvina Shipe used her position as administl.ative assistant with the REng Farm Citizens

Assent)1y (hereinafter "KFCA") to gain access to checks made payable to KFCA, which she then

diverted by depositiiig the checks into her personal bank accounts, without authorization, and

used the proceeds for her personal benefit. Between September 20, 20119 and August 4, 2017,

Shipe diverted 825 checks totaling $291,276.26. In addition, Shipe purchased personal items

which were charged to office-supply cliai.ge accounts maintained by KFCA. Shipe forged the

signature of the KFCA general manager on invoices I.eceived from the office supply vendors to

authorize payment of the personal purchases with KFCA funds. Between May 17, 2011, and

May 19, 2017, Shipe charged appi.oximately $69,706.92 of personal purchases to the KFCA

accounts. The total loss to KFCA from the embezzlement schemes was approximately

$360,983 .18.

KFCA Background

King Farm is a community consisting of approximately 3200 hoinesg covering 480 acres.

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 It is self-managed, with a five-member elected board of ti.ustees and an elected pi.esident

position. KFCA contracts with Zalco Realty, Inc., for financial management services. KFCA

office persounel is comprised of thi.ee employees: a general manager, an assistant manager, and

an administrative assistant. Shipe had been the administrati\Je assistant since approximately

2008.

Shipe's duties as administrative assistant included typical office functions: filing,

copying, maintaining emails, answering phones, ordel.ing office supplies, and interacting with

community residents. Shipe also received payments (generally checks) being made to KFCA.

Per KFCA procedures, payments received are forwarded to Zalco Realty for deposit and

accounting.

The KFCA office receives pa}Jments from several income streams, including:

i. reiital ofcommuiiity facilities

2. community newspaper ads

3. pool passes

4. packages of HOA documents for property re-sale purposes

Embezzlen|_Q±±±;J±±!±£!±±£J2jjapQnl

InJulyandAugust2017,JenniferGilmore,KFCAgeneralmanagergwascompilingfinancial

data to prepai.e the budget for the next fiscal year® Her review of the data indicated that KFCA

expenses were consistent but the revenue seemed to be off; Further review led Gilmore to

believe checks received wei.e possibly not being coded correctly. Gilmol.e also noticed that some

eventsschedu]edfoi.KFCAfacilitieshadbeendele{edfromtheschedu]ingcalendarkeptonthe

computer. She was able to recover the information, and it appeared to hei. that
Shipe was
keeping two calendars. Also in early August, Gilmore received all inquiry from a resident about

a reset.vation that the resident had made to use a K.FC`A facility but did not have an executed

conti.act. In attempting to resolve that inquiry, Gilmore asked for a copy of the resident's deposit

check. When looking at the cashed check, Gilmore noticed the check had not been deposited to a

KFCA account®

On August 109 2017, Gilmore found an envelope on Shipe's office desk addressed to

"Jen" and the word "sorry" written on it. Inside was a one-page letter that implied that Shipe had

taken money because she owed a lot of taxes.

On Friday, August 11, 2017, Gilmore and Arthur Dubin, Zalco Realty presidents met with

Shipe when she came to the KFCA office. Shipe came in crying and stated that there was "not

that much missing." Shipe indicated that she got behind with her rent and stated that she does

ambling.

An initial 1.eview of financial records conducted by KFCA identified a diversion of

checks made payable to KFCA in excess of $100,000.

Defendant Bank Account Records Review

The State has obtained personal bank account recoi.ds of Melvina Shipe for the period

Januay 2011 to August 2017, which included accounts at Wells Fargo Bank and TD Bank.

A review of the Wells Fargo Bank account records, including detailed deposit records,

identified 405 checks, made payable to KFCA, totaling $125,277.97, deposited to the personal

account between September 20, 2011, and February 2, 2015.

A review of the TD Bank account records, including detailed deposit 1-ecords, identified

420 checks, made payable to KFCA9 totaling $165,998.29, deposited to the pet.sonal account

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betv`Jeen April 10, 2015, and August 49 2017.

Aiialysis of the deposit records showed the pattern of check diversions was consistent

ovel. a 70-month period between 2011 and 2017. The monthly average of diverted checks was

approximately12checkspei.month9withamonthlydollardiversionofapproximately$4,161.

There was a noted increase in diversions however in the last two years. Prior to February 2015,

the monthly average numbei. of diveiled checks was 10 checks with a monthly avel.age of $2,982;

begirming in Apt.il 2015, the monthly aver.age number of divelled checks increased to 15 checks

per month, with a monthly average of $5,928.

Hi_authoiized _Purchases Charged to _KE£A

KFCA has reviewed purchases made from Quill, an office supply company utilized by

KFCA. The review identified purchases made by Shipe which were delivered directly to Shipe's

home addresso Gilmore noted significant put.chases of house products, kitchen supplieso and

other items that KFCA would have no need for.. Gilmore i.eviewed the Quill invoices forwarded

to Zalco Realty for payment and confirmed that her signature on invoices authorizing payment

were forgeries. The unauthorized purchases total appi.oximately Sl 6,450 and occuiTed between

November 2015 and May 2017.

In addition, KFCA has reviewed purchases made fi.om Office Depot on a KFCA account.

The review identified purchases made by Shipe that were delivered dii.ectly to Shipe's home

address. Gilmoi.e noted significant purchases of electronics -computers, tablets, accessories,

and other items that were not for KFCA use. Fuilhei.more, approximately $25,000 in gift cards

were purchased. Gilmore reviewed the Office Depot invoices forwarded to Zalco Realty for

payment and confirmed that her signature on invoices authoi.izing payment were for.geries. The

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unauthorized i]urchases total approximately $53,256 and occurred between May 2011 and

October 201 5 .

All the events above occult.ed in Montgomery County, Mat.yland.

This pi.offer does not contain all the evidence the State would have presented at trial, but

met.ely sets forth sufficient facts to satisfy each element of the crime to which the defendant is

entering a plea of guilty. The State reserves the right to supplement this Proffer with additional

facts at the time of sentencing.

Respectfully submitted,

John J. Mccarfhy
State's Attorney for
Montgomery County, Maryland

Assistant State's Attorney for

MOTntgomery County, Maryland
50 Maryland Ave.
Rockville, MD 20850
 D e`f ;endan[ ' s Accei)lance

I have read each of the pages constituting this Proffer of Proof and have discussed it with
my attorney, Joseph Stolz, Esquire. I fully undet.stand this Pi.offei. and agree to it without
reservation. I do this voluntarily and of my own free will, intending to be legally bound. No
the.eats have been made to me, nor am I under the influence of anything that could impede my
ability to undei.stand this document fully.

Darfr€. f f i/ / @//g
Melvina Shipe
Defendant

Aft oi.ney's ACJcnowledgmenr

I have read each of the pages constituting this Proffer of proof, reviewed I.hem with my
client, and fully discussed each of the elements of this crime with my client. These pages
accurately set forth the facts of this case. I concur in my client's desii.e to plead guilty and admit
these facts.