Several employees of Tony Packo’s restaurants — some current and some former — testified in Lucas County Common Pleas Court Tuesday during the criminal theft trial of Tony Packo III and Cathleen Dooley.
One of those employees said she believed that the criminal prosecution against the pair was “shameful.”
Gina Marie Staelgraeve, the former general manager at Packo’s at the Park, and Jason Mandel, the downtown restaurant’s current manager, both testified about a parking lot leased by the Packo’s company for its customers. The pair testified that the parking lot, which was leased for $60,000 a year since 2006, brought in cash during special events and baseball games and that the cash was usually collected from the safe by Mr. Packo or Ms. Dooley.
The managers said that the cash was not shown in financial records as a profit into the restaurant until Mr. Mandel asked about it in 2009. The practice of taking cash and not ringing it into the register changed when a court-appointed receiver assumed operational control of the company in 2010, he said.
Mr. Packo, 39, the grandson of the founder, and Ms. Dooley, 47, the company’s controller, are each charged with aggravated theft for allegedly stealing about $170,000 from the company over a four-period. The allegations first arose when one of the company’s shareholders, Robin Horvath, also a grandson of the founder, found what he believed were discrepancies in the company’s financial records.
Although Ms. Staelgraeve testified that she left the company after a disagreement with Mr. Packo in 2007, she said that the company was good to her and that she believed the family to be “honest” people. When questioned by Mr. Packo’s attorney about her personal opinion of the criminal lawsuit, Ms. Staelgraeve said she thought it was “sour grapes.”
“From my outside perspective, it was a family business that was run as a family business. It wasn’t a large company where things were cut and dried and procedures were laid out,” she said. “I think, to me, it looks like a case of sour grapes that are playing out in the taxpayers’ court.”
Among the theft allegations are that Mr. Packo took cash from parking proceeds at the company’s ballpark location, cost the company money in fees so as to pay its taxes on his personal credit card and so to receive reward perks, and received unauthorized payment advancements and reimbursements. Ms. Dooley is accused of helping to facilitate the alleged thefts.
At the time, Mr. Horvath owned half of the company; Mr. Packo’s father, Tony Packo, Jr., owned one-third of the company, and Mr. Packo owned one-sixth. The company has since been put into receivership and sold to TP Foods LLC.
Mr. Packo and Ms. Dooley were initially charged with three counts of aggravated theft, which were charged in the alternative. According to court records, the prosecutor’s office dismissed two counts against each defendant Monday.
Also testifying Tuesday was attorney Cary Cooper, who represented Mr. Horvath and his mother, Nancy Packo Horvath, during a 2002 conflict with Mr. Packo and his father and again in 2010.
Mr. Cooper testified about a meeting held between the three shareholders and their attorneys.
During that March, 2010, meeting, Mr. Cooper recalled that Mr. Horvath presented documentation about a variety of issues, including alleged misappropriations of funds. Although he could not testify in detail about Mr. Horvath’s allegations, he said the meeting resolved issues in four areas: cleaning up accounting practices; improving internal communication; discussing and working on bonuses; and putting Ms. Dooley on probation.
Mr. Cooper acknowledged he was led to believe that the company had a cash flow problem during that period of time. When shown an email from Mr. Packo dated March 30, 2010, he testified that it said that each of the three shareholders were to receive an increase of $1,500 per payroll for the next 12 months.
A total of 15 witnesses have testified during three days of testimony during the trial over which Judge Frederick McDonald is presiding. The jury of seven men and five women will return for additional testimony today.
Contact Erica Blake at: email@example.com or 419-213-2134.