Former Jewish Exponent Director of Business Operations Cheryl Lutts was sentenced on July 25 to 20 months in federal prison for embezzling about $1.7 million from the Exponent and her subsequent employer, the Philly Pops, The Philadelphia Inquirer reported.
U.S. District Judge Timothy J. Savage also ordered Lutts to repay the $1.3 million she still owes the Jewish Federation of Greater Philadelphia (which owned the Exponent at the time) and the Pops, as well as the insurance companies that reimbursed the two nonprofits.
A year earlier, Lutts pleaded guilty to 24 counts of wire and mail fraud.
She faced a maximum punishment on each count of 20 years in prison, three years of supervised release, a $250,000 fine and a $100 special assessment.
Lutts, 44, of Philadelphia, admitted that she used the stolen money to pay off thousands of dollars in credit card debts associated with travel and lodging, legal services, and funeral costs, as well as things such as utility bills and her cellphone.
At the sentencing hearing, Lutts said her addiction to prescription painkillers fueled the embezzlement.
“I was only thinking of myself and getting high — not the harm that I was inflicting on everyone else, especially the companies that trusted me,” she said, according to the Inquirer. “Never in my life have I felt this ashamed and humiliated … My behavior was unacceptable in every way.”
Lutts’ attorney Maranna J. Meehan said her client became addicted to painkillers after a 2014 car accident; she found a doctor to keep writing her prescriptions, the Inquirer reported. That doctor, Andrew Berkowitz of Huntingdon Valley, is serving a 20-year prison term for overprescriptions.
Prosecutors pushed back against defense requests that Lutts be spared jail time.
“The breadth of [her theft] shows that Lutts was not engaging in the fraud simply to pay a few necessary personal expenses due to tight economic times,” Assistant U.S. Attorney Maryteresa Soltis said. “Rather, it demonstrates that she used the … funds as her own personal treasure trove.”
Prosecutors have said that Lutts siphoned about $1.4 million from the Exponent between 2016 and 2019, as well as about $255,000 from The Philly Pops, where she worked as controller after being fired from the Exponent in August 2019.
Lutts, who was an Exponent employee for 18 years, was fired for poor performance before the fraud was discovered. Her replacement found a fabricated bank statement in Lutts’ desk drawer on his first day on the job.
She concealed her actions with doctored bank statements and also secretly took out a corporate credit card in her name.
The Exponent and the Jewish Federation consulted first with Frank Riehl, the latter’s director of security, and then the Philadelphia Police Department before calling in the FBI.
After Lutts was fired by the Exponent, she began working as the controller for the Philly Pops. The Inquirer reported in 2022 that a Pops spokesperson said the organization fired her after discovering “questionable transactions.”
Maybe this partially explains why the Philly Pops is in debt and can’t rent a space. I’m glad the replacement employee at the Exponent discovered the problem. I hope funds can be recovered for both the Exponent and the Pops.