Vektek chief says company is strong in spite of alleged embezzlement
By Gwendolynne Larson
Friday, August 8, 2008
Federal officials are prosecuting a former company officer for alleged embezzlement, but an Emporia manufacturing company continues to grow.
James W. Foremsky, former chief financial officer for Emporia’s Vektek, and his wife, Susan, were indicted Wednesday on a single count of conspiracy to commit crimes including bank fraud, wire fraud and money laundering. James Foremsky was Vektek’s CFO from June 1995 until Nov. 8 of last year.
Beginning in 2002 until he left, investigators say, Foremsky took company funds to maintain a lavish lifestyle “including expensive vacations, bar tabs, meals, new vehicles, mortgage payments and a hobby maintaining and showing jumping horses.”
The criminal complaint asks for forfeiture of $2,646,554 in proceeds.
On Thursday, after news of the indictment broke, Vektek President Troy Estes said the company’s foundation remains strong.
“Vektek remains strong and sound financially,” Estes said. “Vektek continues to be aggressive in updating to state-of-the-art manufacturing equipment, investing in new product development and has seen continuous growth in sales.”
According to the company’s Web site, Vektek was the creation in 1974 of two graduate engineers who wanted to build hydraulic pumps, machine parts and cylinder assemblies. By 1986, the company had introduced the VektorFlo line and expanded to direct sales and customer service offices in St. Joseph, Mo. The company is owned by Joe Gray, who also owns Gray Manufacturing Co. in St. Joseph.
In 1974, Vektek, then called G-T Machining, had 12 employees, according to past interviews with Gray and former president Roger Craft. Now, Estes said, Vektek employs 125.
It has an international reputation for the hydraulic work-holding clamps it produces. The products are sold both domestically and internationally, Estes said.
As for the criminal complaint, The Topeka Capital-Journal reported in today’s edition that, if convicted, it may be difficult to recover the more than $2.6 million from the Foremskys.
The Shawnee County appraiser's office has appraised the Foremskys, home at $143,900, the Topeka newspaper reported. In addition, the family’s vehicles are a 2006 Nissan Pathfinder, 2007 Nissan Pathfinder, 2008 Nissan Pathfinder and a 2008 Acura.
The U.S. Attorney's Office also will try to confiscate two bank accounts held privately by the Foremskys with balances totaling about $20,000, the Capital-Journal story said.
According to more details from the complaint obtained by the Capital-Journal, Foremsky allegedly issued checks on Vektek accounts then showed them as “void” on spreadsheets. He also is accused of ordering wire transfers from Vektek accounts to pay credit card charges, and investigators claim that Susan Foremsky took a cashier’s check for $18,130 drawn on a Vektek account to pay off the family’s mortgage.
create (anonymous) says...
Amazing! For all the money they stole, they don't have a pot to...or a window to throw it out of. It was all disposable. Well, where they're going, they don't need the house or the cars or furniture or bank accounts anyway.
August 8, 2008 at 3:52 p.m. ( permalink | suggest removal )
dale011 (anonymous) says...
So what happened to Sarbannes Oxley's forced audits in this case? Companies are having to spend tons of cash just to make sure the auditors are auditing the auditors. Sad, very sad.
August 8, 2008 at 3:54 p.m. ( permalink | suggest removal )
Absolute (anonymous) says...
Their lavish lifestyle included a home appraised at only $143,000? That is a bit odd.
August 8, 2008 at 4:02 p.m. ( permalink | suggest removal )
Deepthoughts (anonymous) says...
Real Estate must be much cheaper in Shawnee Co. than in Lyon Co.
August 8, 2008 at 4:19 p.m. ( permalink | suggest removal )
rdgrey (anonymous) says...
House must be in the highland park area. Well they will get three squares a day, wall to wall concrete, single size bedding for a lonely nights rest, and a room mate named Big Bubu.
August 8, 2008 at 8:04 p.m. ( permalink | suggest removal )
jayhawker (anonymous) says...
And they won't have to pay a cent of the new sales tax!
August 8, 2008 at 8:16 p.m. ( permalink | suggest removal )
neighbor (anonymous) says...
The hobby of keeping, maintaining and showing jumping horses must be very expensive. $143K house and $100k spent to buy their vehicles leaves alot of money for bar tabs, vacations and meals. I would think it would be hard for two people to spend that much money and not get flagged by the IRS sooner.
August 9, 2008 at 9:24 a.m. ( permalink | suggest removal )
create (anonymous) says...
Not if they were paying cash.
August 9, 2008 at 10:07 a.m. ( permalink | suggest removal )
justaflushaway (anonymous) says...
I feel sorry for their kids who were going to top notch colleges, all along they were probably thinking and acting like their parents were really rich, now it comes out that the parents were nothing but thieves. And they probably had their cars taken away also. what a sad day for the kids
August 9, 2008 at 10:22 a.m. ( permalink | suggest removal )
neighbor (anonymous) says...
You can't spend that type of cash without having bank transactions to obtain the cash first Create. I'm sure Vektek didn't have $2-3 Million in cash on hand. They had to be making transfers to get it. They did wire transfers that are monitored, they did cashiers checks off the accounts which are monitored, they wrote checks to themselves, etc. I suspect they may have some of it stashed in accounts under different names.
August 9, 2008 at 1:07 p.m. ( permalink | suggest removal )
create (anonymous) says...
You're right, neighbor, thank you. I got to thinking about that later and I'm glad you said something. Also, these days, larger cash transactions are reported to Homeland Security. And you're right about them possibly having accounts under different names. As a CFO, I'm sure he knew all the ropes.
In my younger days, I worked for a bank in Honolulu, and part of my job was to report accounts that had gone with no activity for ten years. (In those days, no computers, it was all done by manually looking it up.) All of those funds went to the state. I was still learning and was always shocked at how much money was involved -- hundreds of thousands of dollars. And that was only from one bank. One day, the head cashier told me that many of those accounts were likely "stash" accounts where the stasher may have died or was himself stashed away in some nursing home.
August 9, 2008 at 3:16 p.m. ( permalink | suggest removal )
washburnfan1 (anonymous) says...
You know, I actually know this guy and from what I've heard, Vektek is a family business in which MANY members of the owner's family were on payroll. Besides, he was a good guy and never lived the "lavish life". He spent the majority of the money on his daughter's successful riding career.
August 11, 2008 at 12:34 a.m. ( permalink | suggest removal )
Deepthoughts (anonymous) says...
So that makes it okay to STEAL? Only a Washburn person would have that kind of logic!
August 11, 2008 at 8:33 a.m. ( permalink | suggest removal )