Sherry Rae Udenberg, a former Lake Superior School District employee, has reached a plea agreement with the Lake County Attorney's office, pleading guilty to one felony count of theft with counts of felony embezzlement of public money and felony forgery being dismissed. She was in court today in front of Lake County District Court Judge Kenneth Sandvik.
Udenberg was charged with embezzlement of an estimated $65,275 from the district from 2007 to 2009. She worked as a financial assistant and food service coordinator for the Lake Superior School District until resigning in October.
According to the plea agreement, she will get a 10-year "stay of imposition" of a sentence and six months at the Duluth Bethel female offenders program or 90 days in jail and 60 days of electronic monitoring. She will also face restitution requirements at a March 1 sentencing.
A stay of imposition is a type of probation. An offender 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 is dropped and the offender has a record of a misdemeanor rather than a felony.
A probation officer will look into the agreement by investigating Udenberg's past and will abide with the plea agreement or offer another arrangement. Udenberg could back out of her guilty plea if the officer disagrees with the conditions outlined today.
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Lake County Attorney Russ Conrow said the plea agreement isn't unusual. "Most cases are settled before trial."
Udenberg's attorney, Arthur Albertson, said he expects Udenberg's probation to be cut in half to five years.
She probably will serve time at Duluth Bethel; the only other option would be jail. According to Bethel's Web site, it provides "individuals dignity, hope and the opportunity to improve their quality of life through chemical dependency rehabilitation and community correction services."
Udenberg, who worked for the district for 13 years, faced three felony counts after admitting she stole money from the lunch program at Two Harbors High School, a Lake County criminal complaint filed says. If she was convicted on all three counts, she would get face penalties of up to 25 years in jail and $50,000 in fines.
Under district policy, Udenberg was supposed to count money brought in for student lunch accounts after it was counted by the high school office. She was supposed to return the money to that office for deposit but, instead, according to the complaint, made false documents in order to pocket cash and deposited checks and coins only into the school's bank account.
Student accounts were credited and the money stolen is covered by insurance. Lunch money collected from students in Silver Bay and Minnehaha Elementary in Two Harbors was directly deposited into the bank and didn't go through Udenberg.
After a fraud complaint was filed in October, business manager Susan Mitchell 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 funds beginning in March 2007 until her departure last fall.
Udenberg used her own computer program to mirror the official district accounting program to "make sure everything matched" to cover the missing cash, the complaint says. She also admitted, according to the report, to creating a false medical bill of $420 and submitting it to her benefits plan for reimbursement.
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Mitchell told Lake County Deputy Erik Furo there may be other funds missing. Udenberg deleted many of her computer files before leaving the district but they were later recovered. The district reported documents showing the false balance sheets.
School district superintendent Phil Minkkinen has made it clear to district staff on what the proper procedure is. "We've already made adjustments so this doesn't happen again."
He remains focused on moving past Udenberg's transgressions. "I'm disappointed she did what she did," he said. "Justice is served, I suppose. I hope we don't have this problem again."
