Former Kansas bank VP who embezzled more than $100K over six years avoids prison time

A former Kansas bank executive who claimed $100,000 in missing money was nothing more than a software glitch has been ordered to repay the bank, but avoided prison time after pleading guilty to a federal crime.

Debra “Debbie” Kay Converse, 60, of Harveyville, was sentenced on Monday to four months of house arrest and was ordered to pay about $107,175 in restitution, U.S. Attorney Stephen McAllister said in a news release.

Converse had faced up to 30 years in federal prison and a fine of up to $1 million after pleading guilty in December in U.S. District Court in Topeka to one count of embezzlement.

In addition the the home confinement, the judge ordered her to serve three years of supervised release. She was not fined.

A narrative in her plea deal details the findings of an investigation into her financial activity.

The crime started around June 2014 and continued to February 2019. Converse was the vice president of First National Bank of Harveyville, a town of about 250 people in Wabaunsee County. Another bank employee first reported unusual Automated Clearing House codes to the bank president in February 2019.

A review of the previous two weeks of financial transactions showed other codes had been changed and a small amount of cash was missing. Converse had administrative rights to the software and the ability to change the codes. The bank president questioned Converse about the changed ACH codes, and she claimed it was merely a software glitch that would be corrected at the end of the quarter. She denied stealing money from the bank.

The bank president reported the crime to the sheriff’s office.

An accountant hired for an audit by the bank discovered more than $101,000 had gone missing between 2014 and 2019, or an average of nearly $17,000 a year for six years.

Further investigation determined Converse had stolen an additional $5,700 from the bank through her position as Harveyville city treasurer. As treasurer, Converse wrote monthly checks of $100 to her own bank as compensation for processing utility payments by residents and utility deposits by the city clerk.

For 57 months, or nearly five years, Converse cashed the $100 checks for herself.

According to a sentencing memorandum filed by a defense attorney, Converse was “a loyal and devoted employee” of First National Bank for 29 years. She had started working for the bank in 1985 after graduating from college.

But Converse grew up in a poor family where her parents argued about money problems and she was embarrassed and picked on for wearing homemade clothes, her defense attorney wrote. In 2014, she became worried about being financially ready for retirement. She was 54 years old and had a full-time salary of $24,000. She panicked and began to steal from the bank.

This story was originally published March 9, 2020 at 4:34 PM.