Anaheim man's gambling addiction fueled $3.3 million theft, he gets 3 years in prison
May 4, 2015
By SEAN EMERY / STAFF WRITER
SANTA ANA – An Anaheim man who embezzled millions from an Irvine company to feed a gambling addiction was sentenced Monday to three years in federal prison.
Steven Hagstrom, 38, pleaded guilty last year to embezzling an estimated $3.3 million from Sentinel Offender Services, where he worked as a controller. He admitted to gambling with the money at casinos in California and Las Vegas.
In a courtroom at the Federal Courthouse in Santa Ana on Monday, Judge David O. Carter ordered Hagstrom to serve 37 months in prison and pay more than $2 million in restitution to Sentinel and an insurance company, having already paid back the rest of the money he stole.
Attorney Diane Bass, who represented Hagstrom, traced his addiction to gambling back to a “hermetic” childhood followed by the excitement and freedom he found during his first trip to Las Vegas on his 21st birthday.
A couple of rounds at the slot machines initiated what turned into a 15-year gambling “compulsion,” Bass argued in a pre-sentencing brief.
During Monday’s federal court hearing, Bass described Hagstrom’s childhood as a “flat line on a heart monitor,” and his first trip to Las Vegas as if his “heart was attached to a defibrillator.”
Gambling became a daily fixture in Hagstrom’s life, Bass claimed. He would go to Vegas every weekend and spend weekdays after work at local casinos.
By the time he moved up to the controller position at Sentinel, Hagstrom had turned to embezzlement.
As part of his plea deal, he admitted to transferring money from Sentinel bank accounts into a “clearinghouse” account and then into his own personal accounts.
To try to hide the thefts, Hagstrom didn’t record the transfers in company ledgers.
In April 2013, a year after authorities say the embezzling began, the FBI and IRS became aware of the embezzlement and notified Sentinel. Authorities have not said how they were tipped off.
Hagstrom indicated that he is trying to turn his life around and has begun attending regular Gamblers Anonymous meetings.
“I do want to apologize to all my victims, particularly Sentinel and my family and friends, who I let down greatly,” Hagstrom told the judge during Monday’s sentencing hearing. “I cannot even express enough how sorry I am and my regret for my conduct.”
Hagstrom had initially faced up to 10 years in prison.
Prosecutors agreed to recommend a lesser sentence since Hagstrom admitted responsibility.
But while prosecutors acknowledged Hagstrom’s problems with gambling, they pointed out that the approximately $70,000-a-year position he held with Sentinel provided him with enough money to pursue his interests at casinos.
Prosecutors also pointed out that his childhood challenges didn’t stop Hagstrom from getting a degree and becoming a “successful, productive member of society.”
Sentinel’s government contracts for electronic monitoring of offenders – including a $100,000 a month agreement with the federal government – led to Hagstrom being tried in federal court.
Assistant U.S. Attorney Lawrence Kole argued in his pre-sentencing brief that the embezzlement not only threatened Sentinel, but also the “proper operation of the criminal justice system.”
Much of the money received by Sentinel was merely being held in trust, the prosecutor noted, and still officially belonged to the courts and other parties.
With more than 500 employees, Irvine-based Sentinel is one of the largest private offender monitoring firms in the nation.
The company uses technology, including GPS, to track those who would otherwise be behind bars.
The county of Orange ended a contract with the company in 2013 after an audit concluded that GPS bracelets provided by Sentinel stopped working for more than a dozen criminals, and that the county wasn’t notified when one person failed alcohol tests more than 80 times.
Sentinel responded by reassigning, disciplining or terminating employees.
Steven Hagstrom, 38, pleaded guilty last year to embezzling an estimated $3.3 million from Sentinel Offender Services, where he worked as a controller. He admitted to gambling with the money at casinos in California and Las Vegas.
In a courtroom at the Federal Courthouse in Santa Ana on Monday, Judge David O. Carter ordered Hagstrom to serve 37 months in prison and pay more than $2 million in restitution to Sentinel and an insurance company, having already paid back the rest of the money he stole.
Attorney Diane Bass, who represented Hagstrom, traced his addiction to gambling back to a “hermetic” childhood followed by the excitement and freedom he found during his first trip to Las Vegas on his 21st birthday.
A couple of rounds at the slot machines initiated what turned into a 15-year gambling “compulsion,” Bass argued in a pre-sentencing brief.
During Monday’s federal court hearing, Bass described Hagstrom’s childhood as a “flat line on a heart monitor,” and his first trip to Las Vegas as if his “heart was attached to a defibrillator.”
Gambling became a daily fixture in Hagstrom’s life, Bass claimed. He would go to Vegas every weekend and spend weekdays after work at local casinos.
By the time he moved up to the controller position at Sentinel, Hagstrom had turned to embezzlement.
As part of his plea deal, he admitted to transferring money from Sentinel bank accounts into a “clearinghouse” account and then into his own personal accounts.
To try to hide the thefts, Hagstrom didn’t record the transfers in company ledgers.
In April 2013, a year after authorities say the embezzling began, the FBI and IRS became aware of the embezzlement and notified Sentinel. Authorities have not said how they were tipped off.
Hagstrom indicated that he is trying to turn his life around and has begun attending regular Gamblers Anonymous meetings.
“I do want to apologize to all my victims, particularly Sentinel and my family and friends, who I let down greatly,” Hagstrom told the judge during Monday’s sentencing hearing. “I cannot even express enough how sorry I am and my regret for my conduct.”
Hagstrom had initially faced up to 10 years in prison.
Prosecutors agreed to recommend a lesser sentence since Hagstrom admitted responsibility.
But while prosecutors acknowledged Hagstrom’s problems with gambling, they pointed out that the approximately $70,000-a-year position he held with Sentinel provided him with enough money to pursue his interests at casinos.
Prosecutors also pointed out that his childhood challenges didn’t stop Hagstrom from getting a degree and becoming a “successful, productive member of society.”
Sentinel’s government contracts for electronic monitoring of offenders – including a $100,000 a month agreement with the federal government – led to Hagstrom being tried in federal court.
Assistant U.S. Attorney Lawrence Kole argued in his pre-sentencing brief that the embezzlement not only threatened Sentinel, but also the “proper operation of the criminal justice system.”
Much of the money received by Sentinel was merely being held in trust, the prosecutor noted, and still officially belonged to the courts and other parties.
With more than 500 employees, Irvine-based Sentinel is one of the largest private offender monitoring firms in the nation.
The company uses technology, including GPS, to track those who would otherwise be behind bars.
The county of Orange ended a contract with the company in 2013 after an audit concluded that GPS bracelets provided by Sentinel stopped working for more than a dozen criminals, and that the county wasn’t notified when one person failed alcohol tests more than 80 times.
Sentinel responded by reassigning, disciplining or terminating employees.
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