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Restitution payment frees jailed embezzler

By Matt Gryta
Updated: March 02, 2010, 6:49 am /
Published: March 02, 2010, 12:30 am

Peggy Gaiser, the former manager of a Town of Tonawanda discount greeting card store who pleaded guilty to embezzling at least $175,716 to pay off her casino gambling debts, was released from custody Monday.

State Supreme Court Justice M. William Boller had jailed Gaiser on Dec. 23 when she didn’t come up with an initial $50,000 restitution payment that he had ordered after she pleaded guilty.

On Monday, he ordered her released after her relatives and friends came up with the payment. He told her to get a job within the next month so that on April 1 she can begin to make monthly restitution payments of $210 to the Card$mart corporation for the next 10 years.

Gaiser, 53, of Grand Island, a longtime Card$mart worker and manager of its store at 224 Highland Avenue, Town of Tonawanda, for two years before her August 2008 firing, thanked her brother Carlton Fornoff in court for coming up with the bulk of the $50,000.

The judge told her that if it hadn’t been for “your friends and family” using their own funds to make the initial payment, he had been prepared to send her to state prison for a number of years.

He rebuked Gaiser for her “breach of trust.” He told her he found her embezzlement to be “a troubling case” because it involved “such a large, large amount of money.”

Alex Gillies, general manager of the Highland Avenue store, was present in court as Gaiser’s attorney, Thomas J. Eoannou, turned over the last of the initial restitution money that the judge had demanded before releasing her from jail.

Eoannou told the judge that Fornoff, who makes $7 an hour as a local health care worker, “maxed out” his credit card to come up with all but $5,000 on the advance restitution.

Eoannou called what Fornoff did to get his sister out of jail “an absolutely heroic effort” to help a sibling.

John C. Doscher, chief of the Erie County district attorney’s Special Investigation Unit, told the judge that Card$mart got $25,000 from its corporate insurance carrier to help reimburse it for the Gaiser embezzlement, which still leaves the company $102,073.09 in the hole.

Doscher told the judge that even though Gaiser was forced Monday to sign confessions of judgment for the remaining debt, the $210 a month she will be repaying for the next 10 years is the amount she can “realistically” be assumed to be able to repay.

The judge, who also ordered Gaiser to pay $375 in court fees within the next 60 days, told her that she faces another year in jail if she fails to make the monthly payments.

Court officials confirmed that the 10 years of restitution payments include the 5 percent fee charged by the Erie County Probation Department for handling such court-ordered restitution payments.

Gaiser, who also signed over her 401(k) retirement funds to her former employer, pleaded guilty Aug. 31 to second-degree grand larceny for stealing corporate funds from at least July 1, 2007, until she was fired at the end of August 2008.

According to court records, the $175,716 was all the money for which corporate records at the card store still existed.

Gaiser reportedly told investigators scores of other financial records had been destroyed when a store toilet overflowed.