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Man Sentenced to 10 Years for Embezzling Funds from Employer

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CEDAR RAPIDS, Iowa - A Hiawatha man pleaded guilty and was sentenced Wednesday in Linn County District Court to 10 years in prison for embezzling more than $200,000 from Newell Machinery Company.

Scott F. Donnelly, 50, pleaded guilty to one count of money laundering as part of a plea agreement. The additional count of first-degree theft was dismissed.

Donnelly, the former controller of Newell, admitted in court he funneled $242,532 from the company into a personal bank account he set up. He took 10 checks made out to the company between July 22, 2009 and March 7, 2011 and deposited them in his account.

According to the criminal complaint, Hiawatha police first learned about the missing money when the owners of Newell contacted them in March 2009.

First Assistant Linn County Attorney Nick Maybanks said the investigation revealed Donnelly used the money for personal loans and a mortgage, as well as many luxury items. The funds were tracked to payments that went to a contractor for home renovations, a vacation time share, recreational vehicles and accessories, a piano, auto loans and a spa and pool.

Maybanks said the purchased items or loans made corresponded with the time the checks were stolen from the company.

Donnelly worked for the family owned business for 20 months and may have been the first non-relative hired by the company, Maybanks said.

Donnelly declined to speak before he was sentenced.

Donnelly was sentenced to 10 years in prison and was ordered to pay $10,000 in restitution to Newell as part of the plea agreement.

Maybanks explained Newell was insured for the loss and the $10,000 will cover its deductible.

A manager with Newell declined to comment Wednesday about Donnelly.

Sixth Judicial District Senior Judge Thomas Koehler also ordered Donnelly to pay a $1,000 fine but suspended it to help ensure Donnelly pays the victim restitution.

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