In Wichita, a lawsuit is brewing, one that involves an employee, embezzlement and accountant liability insurance, as the city’s largest pawnbroker, A-OK, calls out its insurers and a local accounting firm. According to the company, there were failures from these entities that failed to protect them from an employee’s embezzlement scheme that’s being blamed for the multimillion bankruptcy filing back in the Summer of 2017.
A-OK filed two lawsuit separate lawsuits back on July 3, saying that the companies that it had relied on to detect and compensate for losses they had incurred from an estimated $1.5 million theft by one of the pawnbroker’s employees, and that the staff didn’t do their jobs. A-OK is listed twice, as A-OK Enterprises and A-OK, Inc.
According to the pawnbroker’s attorney, Randall Rathbun, said that Luck and Associates, alongside founder Jeff Lucke, a certified CA, were hired by A-OK to perform financial audits, but had failed to detect the ongoing embezzlement scheme, and, when it did notice, it took actions contrary to the pawnbroker’s interest due in part to Lucke’s status as a business partner, as the chartered accountant aimed to protect himself from the fallout.
A-OK’s insurers, the pawnbroker claims, made some miscalculations that resulted in A-OK not getting the coverage it had paid for, then refused to back up the accountant liability insurance and pay out on a claim which was tied to the embezzlement, as Rathbun explained. For that particular lawsuit, the defendants are Fee Insurance, based in Hutchinson, Underwriters at Lloyd’s London, and Wexler, Wasserman and Associates, based in Cincinnati.
Each of the suits ask for at least $75,000 in damages.
Jeff Lucke fired back, saying that there were a lot of inaccuracies with A-OK’s claim, and that he has hired Attorney Kurt Harper to deal with the case, but did not elaborate on the matter.
Fee Insurance’s owner, Bob Fee, did not even comment on the matter, only saying that he and his company are working with attorneys to settle the issue. Wexler, Wasserman and Associates, as well as Lloyd’s also remained quiet on the issue.
These lawsuits came over a year after A-OK discovered that one of their accountants, Phillip Jelinek, were transferring large sums of money from their PayPal account into his own personal bank account. The accountant had already pleaded guilt in the court to a count of felony theft, and is expected to pay $587,450.83 in restitution, as well as the possibility of incarceration.