News

Special prosecutor to try embezzlement case

By Bill Moss, Published: April 27, 2023

If the case against a medical practice office manager charged with stealing $413,000 from her boss reaches trial, a special prosecutor from an agency that assists with complex financial crime cases will handle the state’s side.

Andrew Murray recalled that he had been freshly appointed to serve as district attorney in 2021 when an investigator asked to meet with him about the embezzlement case.

“My recollection is an SBI agent that had been assigned to it came in to tell me his preliminary case and what he had,” said Murray, a former U.S. Attorney for Western North Carolina. “And I said, ‘Whoa, that’s a big case, that’s a lot of documents. Let me see if the Conference of D.A.s was willing to take this case.’”

Established by the Legislature in 1983, the N.C. Conference of District Attorneys provides support to the 42 elected district attorneys across the state through training, research and assistance with complex prosecutions. 

J. Kyle Smith is working as a special prosecutor in the trial of Kerry Spachman, who is accused of embezzling the money from the medical office of Dr. James Caserio, a respected and highly regarded internist.

“From time to time, cases are complex and involve a lot of resources,” Smith said. “Particularly in smaller jurisdictions, the elected D.A. will call and ask for assistance on a case given the complex nature of the case, and the amount of money that was involved. We had a request for assistance.”

Smith said he could not answer questions about a pending case and Murray said he has not been handling details of the case since the special prosecutor is on board.

“It was a massive case concerning forensic accounting and going back and figuring out all of the fraud,” he said of the initial conversation with the SBI. “Truthfully, we don’t really have those type of resources in my office. I don’t have a forensic accountant. I don’t have a specialist that specializes in financial crimes fraud and when I got here we had as you know a significant backlog Covid backlog” that he wanted to prioritize.

“So I made the determination that it would be best to be able to get that case (moving) as quickly as possible, being that it had already been sitting in my office for a while, to request the assistance of the special Financial Crimes Unit of the Conference of District Attorneys to expedite that case and also bring expertise in to handle it.”

Unauthorized checks, online shopping

Search warrant applications by Hendersonville police detective Malinda Durner and SBI agent Michael P. Phillips detail the pattern Spachman is alleged to have used to write checks to cash. From 2013 to 2019, she allegedly wrote 81 unauthorized checks payable to cash totaling $82,068 and used the physician’s signature stamp to sign them, Phillips said in a search warrant application. During the same period, she is alleged to have drafted 485 checks for a total of $485,165, commingling “the fraudulent checks with legitimate office and payroll checks for Dr. Caserio to sign.” Investigators said they tracked 566 unauthorized checks that they say Spachman deposited in her personal account at State Employees Credit Union.

Search warrant applications also alleged that Spachman used the practice’s business credit cards to purchase $174,824 worth of merchandise from Amazon, eBay and PayPal and airline tickets from American, United, Southwest and Jet Blue. (It was unclear why the checks’ total of $485,165 reported in search warrants is greater than the total in the grand jury indictment. Also, the Caserios said in interviews that investigators believed it would be hard to prove which online orders were fraudulent and which were legitimate because the merchandise was sent to the medical office, not Spachman’s home.)

In a motion he filed on Feb. 27, Smith, the special prosecutor, reported to the court that in response to a discovery request from Spachman’s defense attorney he had turned over to the defense a wealth of material from the law officers’ investigation. The documents, tapes and videos included seven interviews with Christina Caserio, Dr. Caserio’s daughter, a researcher who created a spreadsheet of the fraudulent checks; interviews of Dr. Caserio and his wife, Marcia; and video interviews of Dr. Caserio’s sister, Rebecca Caserio, a physician who had lost money that she had sent to her brother to keep the practice afloat. Rebecca Caserio has since died.

In a “notice of aggravating factors” the state intends to pursue at trial, Smith checked factors including that the Spachman “induced others to participate in the commission” of the crime. He did not check as an aggravating factor that she “joined with more than one person in committing the offense.” Other aggravating factors the state will pursue, Smith said in the filing, were that Spachman “occupied a position of leadership or dominance” and that she “took advantage of a position of trust or dominance, including a domestic relationship, to commit the offense.”

The Lightning was unable to make contact with Stepp, Spachman’s attorney, for comment on the case.