Walking out of a Lake County courtroom Monday after a sentencing hearing, a tearful Sherry Rae Udenberg was consoled by a group of supporters. She was sentenced to 90 days in jail for embezzling money from the Lake Superior school district's lunch program. She also was sentenced to 60 days of electronic monitoring, 10 years of probation and restitution of $67,403.
Udenberg reported to Lake County Jail later Monday and was then sent to St. Louis County Jail.
A total of $50,000 would go the Lake Superior school district's insurance company, which covered the money taken from the district. The other money would go toward the deductible and for work done by school staff to investigate the theft.
Conditions of the 10-year "stay of imposition," or probation, means Udenberg must comply with conditions established by the court or be sentenced under the offense guidelines. Felony theft is punishable with a 10-year prison sentence and/or a $20,000 fine. If Udenberg complies, the recommended sentence will be dropped and the offense labeled a misdemeanor rather than a felony.
Udenberg's attorney, Arthur Albertson, argued for a lesser sum of restitution but his client decided to forgo a hearing on the dispute because of all the "anxiety" she has gone through.
"Charging her for staff time ... sticks in my craw," Albertson said. He also wanted the court to consider her financial situation, since it's unlikely she will be able to get a job any time soon. She had been a 13-year employee in the district and was the food service coordinator and a financial assistant before abruptly quitting last fall.
When asked to comment outside the courtroom Monday, Albertson was quickly interrupted by Udenberg, who told him not to talk about the case.
Udenberg was charged with felony counts of theft, embezzlement and forgery. The latter two charges were dropped in the plea process. Conviction on all three counts has a maximum penalty of 25 years in jail and $50,000 in fines.
"I'm glad it's over," said Lake Superior school district Superintendent Phil Minkkinen. He said the case was a strain on district staff, and Udenberg's fate is unfortunate for her family.
According to a Lake County Sheriff's Office investigation and court records, the district filed a fraud complaint Oct. 30, two days after Udenberg left a resignation letter on her desk. Business manager Susan Mitchell then began looking into bank deposits Udenberg was responsible for and told an investigator she believed Udenberg had "incrementally stolen thousands of dollars" from the district, mostly from the food service fund.
The court document says she admitted to stealing money beginning in March 2007 until her departure last fall.
Deputy Erik Furo interviewed Udenberg at her rural Two Harbors home, and he reported that Udenberg admitted to taking money from the lunch program. Furo reported she told him she took money in the district office from high school office staff for student lunch accounts. Udenberg, 41, was responsible for recounting the money and returning it to high school staff members. Instead, she deposited the money herself, the complaint says she admitted, pocketing cash and covering the losses with a fake accounting program she created.
Insurance covers the losses and student accounts were credited. Lunch money collected from students in Silver Bay and Minnehaha Elementary in Two Harbors didn't go through Udenberg.
When Furo said the amount estimated to be missing was about $65,000, "Udenberg said that she did not think it was that much, but at this point could not dispute it."