In exchange for being spared prison, a 61-year-old woman has admitted that she stole more than $3.75 million from her Rochester-area employer while she was being financially exploited in what she thought was an online relationship with a man.
Woman admits $3.75M theft from Winona County firm while falling for online relationship scam
A plea deal spares her prison, as she agrees to probation instead.
The Minnesota Star Tribune
April 10, 2024 at 1:59PM
Sharon A. Schmalzriedt of Wabasha, Minn., agreed Tuesday in Wabasha County District Court to plead guilty to felony theft in connection with the nearly 3½-year period when large sums of money were siphoned from the company where she was a bookkeeper.
Prosecutors are agreeing to set aside a 1¾-year prison sentence and instead she would serve five years of supervised probation, perform a thousand hours of community work service and make full restitution to National Chemicals Inc., where she worked until she was fired in March 2023.
The plea deal also calls for dismissal of another felony, financial exploitation of a vulnerable adult, stemming from allegations she stole more than $17,000 and gave it to people involved in the scam.
Schmalzriedt remains free on bond ahead of sentencing, scheduled for June 25.
Police in Lewiston, where National Chemicals is headquartered, contacted the state Bureau of Criminal Apprehension (BCA) about the suspected embezzlement by Schmalzriedt as she worked from home. The owner hired an outside firm to look into “unexpected losses and inconsistencies” in financial statements.
The firm made copies of company records before asking Schmalzriedt to provide financial ledgers within two weeks. A review of her work found she deleted multiple payments from company ledgers, prompting her firing.
A BCA agent discovered payments to businesses and individuals who had no association with the company. From October 2019 until Schmalzriedt was fired, company losses topped $3.75 million.
Schmalzriedt told the agent she was having marital problems and began an online relationship in October 2019 with someone she knew as Erik Lockwood, who claimed he was owed $7 million for work he had done in Dubai, United Arab Emirates.
Schmalzriedt said Lockwood told her that he needed U.S. currency to collect what he was owed and that he would repay her. Schmalzriedt first sent her own money, then company funds to Lockwood and accounts associated with him.
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