Livingston County Court

Geneseo men to pay back employer $400,000

Two Geneseo men previously charged with felony grand larceny in the second degree have plead guilty to reduced misdemeanor charges of petit larceny and have paid $400,000 restitution to a former employer.

Philip Betette, 60, of 5523 Eagle Point Drive, and Terry Sherwood, 62, of 5525 Eagle Point Drive, agreed to plead guilty to misdemeanor petit larceny and provide their former employer, Yorkville Sound, with $400,000 upfront cash remuneration in an agreement which the Livingston County District Attorney’s office mediated between the defendants and their former employer.

Betette and Sherwood had been working for Yorkville Sound since 1999, respectively as sales manager and accountant.

Yorkville Sound Credit Manager Betty Vandenbosch made the complaints against Betette and Sherwood in August, resulting in their arrest by state police on the grand larceny charges. She informed The County News that the actual amount the company alleges to have been stolen is nearly $700,000.

Livingston County Assistant District Attorney Victor Rowcliffe advised that the allegations contained more than unauthorized spending on the company’s credit cards.

“They were given a Yorkville credit card, but they also opened their own cards up under Yorkville,” Rowcliffe said. “They were charging ‘business expenses’ on that card as well.”

The fact that one of the defendants has been very ill and hospitalized accelerated the agreement among the parties.

Grand jury evaluation of the evidence and a subsequent trial involving forensic accountants would have been a time consuming process with no guarantee he would still be alive at the conclusion, Rowcliffe explained.

But if a trial had come about, appropriateness or inappropriateness of specific purchases would have been trial issues and Rowcliffe believes he could have made a good case for misuse including:

• An instance of a defendant being in the hospital for several weeks while his card is still being used for ‘office business expense’ around Geneseo.

• Significant purchases from sporting goods and department stores made in the SUNY town where one of the defendant’s daughters is attending college.

• Credit purchases for gasoline in a company vehicle indicating three tank fillups in Geneseo in a single day.

The complaint made to state police qualifies that the defendants were issued credit cards and allowed to submit expenses for business-related traveling and communication. However, the state police deposition additionally charges the defendants with:

• Writing checks payable to cash for business expenses and keeping the money.

• Mishandling of company health benefits. Betette, against company guidelines, allegedly gave his own A.R.T. employees fully paid health benefits under a Yorkville plan.

• Sherwood, as administrator of the Yorkville payroll, allegedly supplied himself with inflated bonus payments which the company provides in lieu of health plan membership.

Sherwood was represented by Buffalo defense attorneys Norman Effman and Joel Daniels. Betette was represented by Geneseo defense attorneys Scott Cannon and Kevin Van Allen.

The Yorkville Sound office out of which the defendants worked is based in Niagara Falls, NY, but the charges were placed in Livingston County because that is the defendants’ place of residence and where a significant number of unauthorized purchases were made, Rowcliffe said.

“Not all the charges were made here, but enough were so that we had an excess to do the case here,” he noted.

Yorkville Sound is a manufacturer of musical instruments, audio amplifiers (including the Traynor amplifier line), loudspeakers and related professional sound equipment. Betette and Sherwood are former owners of the Rochester-based company Applied Research & Technology (A.R.T.), whose product line is distributed by Yorkville Sound.