Dec 10, 2012 3 min read

PITTSBURGH – The former controller of a natural gas drilling firm was charged in an ongoing federal investigation of more than $5.4 million allegedly embezzled from the Western Pennsylvania business.

A 14-page criminal information filed Monday charges Cheryl Diane Brooks with one count of conspiracy and three counts each of mail fraud and filing false tax returns.

Her defense attorney, Patrick Nightingale, said he and Brooks “have been in negotiations with the U.S. attorney and I anticipate we’ll be moving forward with a plea agreement letter at the appropriate time.”

Brooks began writing and forging checks in February 2004 ranging from $2,000 to $60,000 from the business’ petty cash and operating accounts, investigators said. Brooks allegedly did that at the behest of a man identified in the document only as L.W., the company’s chief operating officer, who used the money for unspecified “personal expenses” until January.

L.W. has previously been identified as Larry Winckler, 52, of Indiana, who was charged by state police in February with embezzling nearly $1 million from the company, based on information police said came from Brooks, according to documents filed in state court. Winckler’s attorney, Martin Dietz, confirmed the ongoing investigation but declined to comment Monday on the charges filed against Brooks.

State police said earlier this year they had reason to believe the thefts would eventually total more than $5 million, and they enlisted the FBI and Internal Revenue Service to help their investigation. In October, Indiana County District Attorney Patrick Dougherty dropped theft and related charges against Winckler and turned the case over to federal prosecutors, which charged Brooks Monday.

Dan Donahue, owner of Falcon Drilling LLC in Indiana, Pa., said he wants to review the criminal charges against his former employee before commenting.

According to the charges, Brooks also received forged or unauthorized checks endorsed by Winckler totaling roughly $557,000 from April 2007 through November 2011, which she also used for personal expenses.

Nightingale declined comment on Brooks’ specific behavior, but said “we’re working with the government to identify avenues of restitution that are available.”

Among other things, Brooks concealed both sets of thefts by creating bogus invoices for drilling bits and other materials from various vendors, manipulating accounting records to hide the lost money and mailing false financial statements to fool auditors, the charges said.

Brooks also allegedly filed false tax returns for the years 2008, 2009, 2010, never declaring more than $64,000 in annual income, even though, prosecutors contend, she earned at least $202,000 for each of those years due to the money she allegedly stole.

If convicted, Brooks faces a maximum of up to five years in prison for conspiracy, up to 20 years for each of the mail fraud counts, and up to three years each on the false tax return counts.