Risk Management

Realtor’s Ex-CFO Charged with $5.4M Embezzlement

The former finance chief is charged with allegedly transferring company funds to his personal credit card and bank accounts.
Sarah JohnsonNovember 7, 2007

Donald Brent Romano, a former CFO of Friedkin Realty Management Group, a privately held real estate company, was slated to face embezzlement-related charges in a federal court on Wednesday.

Romano is accused of embezzling $5.4 million from the San Francisco-based firm. An affidavit filed by FBI agent Keith Nelson in the U.S. District Court for the Northern District of California earlier this week charges that Romano treated Friedkin’s funds as a personal bank account, writing out $2.6 million in company checks and making wire transfers worth a total of $2.8 million for his personal use into his own credit card accounts and bank accounts.

Nelson alleges that Romano conducted mail fraud. The ex-finance chief sent a check from Friedkin’s expense account worth $23,377 that was posted to Romano’s own American Express account two years ago, the FBI agent charges. A message left on Romano’s voicemail by CFO.com was not returned.

The San Francisco Chronicle reported, however, that Romano has admitted wrongdoing. “I admit the deed[s] because I did them,” he told a reporter, according to the newspaper. Nelson also reported that Romano has admitted guilt, declaring that “I’ve been stealing” when he was approached with the embezzlement accusations at Friedkin.

Romano’s alleged misconduct was uncovered by Friedkin’s chief operating officer, Jonathan Gaule, according to Nelson’s account. Two years ago, the recently hired COO heard about a suspicious check that was made out to and signed by Romano and signed by. The check had been recorded as a payment for computer equipment, but Gaule could not find any document to support that claim. Gaule did not return CFO.com’s request for comment.

When Gaule confronted Romano in December 2005 with copies of several checks that had been used for Romano’s personal expenses, he ended a nearly decades-long scheme. During Romano’s tenure as CFO, he would not permit any of his eight accountants to review the company’s office expense account, according to Nelson.Romano allegedly used the funds taken out of that account to overhaul and maintain operations at a 60-unit apartment complex he owned in Sacramento, Calif.

Besides having complete control over Friedkin’s expense account, Romano was able to get away with his allegedly fraudulent behavior by using a rubber stamp with CEO Morton Friedkin’s signature to supplement his own signature on the checks. The firm’s policy required two signatures on its expense-account checks. Morton Friedkin has said he did not sign any of the checks in question, according to Nelson.