Eden Prairie woman pleads guilty to embezzlement

Compelled by a need to shop, a 42-year-old Eden Prairie woman has admitted embezzling more than $1.2 million from her employer, a Golden Valley property management company owned by her mother, in the largest embezzlement case ever prosecuted by the Hennepin County attorney's office.

Stephanie L. Castillo pleaded guilty Monday to theft by swindle and is expected to receive a sentence of six years and eight months, according to County Attorney Mike Freeman. Because of the substantial amount of money involved, Castillo's sentence lands above the state sentencing guidelines' range of roughly four years to 5⅔ years.

When approached by police in October, Castillo, vice president of Balderson Management, confessed to stealing $1.3 million. Freeman said half of the money was burned away on shopping and the rest funded her husband's effort to start a business in Cabo San Lucas, a resort city on the southern tip of Mexico's Baja California peninsula.

The dollar amount in her case tops that in another prominent embezzlement case, that of Joel Pourier, executive director of the Heart of the Earth charter school in Minneapolis, who in 2010 received a 10-year sentence for embezzling more than $1 million.

Castillo is accused of embezzling money from four companies, starting in 2009, while working for Balderson. Cynthia Balderson runs the daily operations of commercial properties, and Castillo provided property management and leasing services.

Castillo had access to clients' funds, and she drafted fake invoices for vendor services and applied some of the payments to Balderson's records, the charges say.

The final step was creating hundreds of fraudulent checks and forging her mother's signature. Castillo made most of the checks payable to herself, but she also used her clients' businesses' checks to pay personal bills, prosecutors alleged.

Once confronted, Castillo told investigators that the thefts started when she was desperate for money to help treat her ailing dog.

In July, Castillo's 12-week-old son Leo died, prompting Eden Prairie police to open an investigation. The Hennepin County medical examiner's office has since ruled Leo's death as "undetermined" and said Tuesday that the case is closed unless law enforcement seeks to reopen it.

Suspicions surfaced when an emergency-room doctor at Fairview Southdale Hospital in Edina found it unsettling that Castillo asked about receiving insurance benefits 20 minutes after Leo died, according to a search warrant affidavit filed in Hennepin County District Court. Castillo has not been charged in the case.

According to the search warrant affidavit, Castillo drove her son to the hospital about 8 a.m. on July 18. He was unresponsive, and she told doctors she had found him in that state in his crib. Her 3-year-old son was next to Leo in the crib, she said.

The baby died about 40 minutes after being brought to the hospital. The doctor said that Castillo was "appropriately upset," but that 20 minutes later she asked how soon death benefits would be paid, the document said.