Councilman's Lawsuit Alleges $1.9M Dollar Theft
Update 12/17/10: LIVE COVERAGE OF THE PLEA HERE
Last February, on the dawn of his re-election campaign, Dallas City Councilman Dave Neumann filed a lawsuit against a former employee, two banks and an accounting firm over a massive alleged theft from the business owned by Neumann and his wife.
The lawsuit, quietly filed in Ellis County, accuses an 18-year employee, Shannon DeMerse, of pilfering $1.9 million dollars from his apparel boutique, Ivy Jane, over a 1 1/2 year period.
"As of the filing of this Petition, it appears that [DeMerse] has stolen $1.9M from Ivy Jane," says an amendment to the original Ellis County lawsuit.
Neumann's business, F L Malik, Inc. (dba Ivy Jane) grosses $2.6 million dollars annually according to Hoovers. If correct, the alleged theft would represent approximately 73% of the annual income to the business.
According to a confession made by DeMerse, filed as an exhibit with the lawsuit, she started taking the money around "mid 2007." "My family has been in financial trouble since Stuart has been out of work," says the handwritten document in part.
In excerpts from a deposition taken on February 10, 2009, DeMerse details how she opened bank accounts using the name "Ivey Jane, Inc" and funneled money from Neumann's business to a variety of destinations.
DeMerse also admitted to stealing Ivy Jane customers' credit card numbers.
Demerse was asked if she used "any credit card numbers belonging to actual customers of F.L. Malik without authority to pay some of these accounts?"
"Yes," DeMerse replied. According to DeMerse, she used "three or four" in January of 2009.
Records also show that DeMerse has contributed to Neumann's city council campaign in the past.
Many questions about the lawsuit remain unanswered and, according to a protective order filed in the case, Neumann may be trying to keep as many of the details as secret as possible.
One big question: how did Neumann and his wife, listed as officers of F L Malik (Ivy Jane), fail to notice something as significant as a $1.9 million dollar theft from a $2.6 million dollar business?
Neumann has also named Compass Bank and Citibank in his lawsuit. The suit accuses both banks of negligence in allowing DeMerse to deposit Ivy Jane's money into her own accounts.
Neumann is also suing his accounting firm, Philip Vogel & Company, accusing them of failing to uncover the theft.
Criminal charges have not yet been filed against DeMerse.
Neumann has been unavailable for comment.