James F. Battin Federal Courthouse

James F. Battin Federal Courthouse

CASEY PAGE, Gazette Staff

An ex-bookkeeper who stole about $170,000 from Midland Printing of Billings to support a fascination with race cars will spend about a year in federal prison.

U.S. District Judge Susan Watters on Wednesday sentenced Polly Annette Peden, 52, to one year and a day in prison and ordered $170,639 restitution for Peden’s guilty pleas to five counts of wire fraud. A sixth count of aggravated identity theft was dismissed.

The term will allow Peden to earn credit for good behavior, which could result in about 10 months in custody. The judge allowed Peden to report to prison.

Larry Johnson, a co-owner of Midland Printing, told the judge that while he wished Peden well and still felt sorry for her, he thought she should do some time in prison.

Calling Peden’s motivation for stealing from her employer “baffling,” Watters followed a prosecution recommendation for prison and rejected a defense request for probation.

Peden initially faced a guideline range of 21 months to 27 months in prison, but the range was reduced after a confidential meeting in court between the judge and parties.

“I don’t exactly know what makes you tick, Ms. Peden,” Watters told her.

Substance abuse, gambling addictions or spending habits usually are explanations for why employees embezzle from employers, the judge said.

None of that seemed to explain Peden’s conduct. Rather, Peden seemed to want to fit in, Watters said.

Assistant U.S. Attorney Colin Rubich, who sought a 14-month sentence, said Peden stole the money and gave most of it to her co-defendant, Jeremy James McCune, 42, of Shepherd, who needed money to race cars.

“It’s bizarre,” Rubich said.

Peden, he said, “just loved race car driving so much she had to steal” from Midland Printing. “Evidently, it’s a pretty expensive endeavor,” he said.

McCune, who was indicted separately, has pleaded not guilty to six counts of wire fraud.

Assistant Federal Defender Dave Merchant recommended five years of probation and said Peden was working and able to make a $2,500 payment toward restitution.

Merchant said he, too, was mystified by Peden’s actions. “Why she did it, I don’t know,” he said, but agreed with the prosecutor that Peden was funding McCune’s hobby. “She wants desperately for people to like her,” he said.

Peden admitted to defrauding the company by writing checks to herself and another person and to forging the signatures of the company’s two owners. She hid the money by altering the company’s check register. All of the checks were written on a Wells Fargo Bank account. The scheme ran for four years, from 2012 to 2016.

Prosecutors allege McCune devised the scheme and convinced Peden to participate. Once McCune got checks from Peden, he would deposit them into an account he controlled and used the money for himself.

During the sentencing hearing, Johnson told the judge about how the theft affected him and the company.

Johnson called Peden an excellent and trusted employee. Business started slowing and at one point, a check bounced, he said. Peden told him that a supplier had tried to cash a check three times, and he said he believed her and blamed himself.

Things “hit the fan” on a Monday, Johnson said, when a delivery driver was upset and told him that his paycheck had bounced.

Johnson said he called Wells Fargo and was told there was nothing suspicious but that the account was overdrawn. When he saw several months of transactions, “it was obvious to me what had been going on,” he said.

Johnson said he met Peden along the outside of the office when she came to work the next day. “I stood there. I didn’t know what to say,” he said.

He smoked a cigarette. Ten to 15 minutes passed with no words spoken, he said.

Finally, Johnson said, he told Peden, “Polly, we found some bad checks.”

Peden replied, “I’ll clean out my desk and leave,” he told the judge.

Johnson said he helped Peden carry her stuff to her car, went into his office, shut the door and cried. “I was feeling sorry for Polly,” he said.

Since then, Johnson said, he’s had “many lectures from various people” including an ex-Marine-turned-accountant who “gave me hell.”

The thefts harmed Midland’s excellent credit rating with suppliers and caused problems with the IRS because quarterly payments were not made, Johnson said.

“It was one terrible mess. It was miserable,” he said. Midland is finally “back on track,” he said.

“I’m still feeling sorry for Polly, but Polly was a thief and should be punished accordingly,” Johnson said.

Saying life is too short, Johnson said, “I do wish Polly all the luck in the world.”

As he left the lectern, Johnson looked at Peden and said, “Good luck, Polly.”

Although Peden had not yet been sentenced, Johnson kept walking to leave the courtroom.

“You can stick around, Mr. Johnson,” Watters told him.

“I’ll read about it in the paper,” Johnson responded as he left.

Peden told the judge she wished Johnson had stayed so she could have apologized to him. “I will still do it somehow,” she said.

“I’m sorry from the bottom of my heart. I truly, truly regret what I’ve done. I accept responsibility for my part in this,” Peden said.

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Federal Court, Yellowtone County Reporter

Federal court and county reporter for The Billings Gazette.