Manager embezzled from yacht club — to pay for ‘gambling and call girl habit,’ cops say
Police arrested the manager of the Key West Yacht Club on Wednesday on an embezzlement charge after auditors reported he stole almost $70,000 from his employer over a four-year period.
When confronted by the club accountant and assistant manager, Paul Gallagher admitted to taking the money, and said he used it to pay for his “gambling and call girl” habits, according to a Key West Police Department report.
Gallagher, 55, was arrested Wednesday on a warrant and booked into Monroe County jail around 8 p.m. He was released on a bond of $75,000 about an hour later.
Reached for comment by telephone Thursday morning, Gallagher, who had worked at the club for about nine years, hung up on a reporter and didn’t answer another call.
Yacht club board members did not immediately respond to email and telephone requests for comment.
According to Key West Officer Kenneth Beerbower’s probable cause report, an accountant at the club first noticed money was missing in late October when she was completing the 2019 year-end audit, and discovered $15,640 was gone from the annual funds.
After trying to narrow down where the missing money belonged, the accountant narrowed it to a general account that was used to pay for “construction repairs and other small expenses,” Beerbower wrote in his report.
The accountant, Louanna Williams, noticed that deposits into that account consisting of large amounts of cash were not going to the bank.
The accountant and assistant manager then contacted the accounting firm that provides the yacht club’s budgeting software and discovered that even more money was missing, and that someone with access to the computerized system “could have manipulated the deposits,” Beerbower wrote.
They then found out that Gallagher had contacted the software company years earlier and was given access to the “back office” portion of the system, according to the report. Both the accountant and assistant manager did not have the same access. According to Beerbower’s report, “that is when they first suspected Gallagher was stealing funds from KWYC.”
After a complete audit of the software system, yacht club officials found a total of $68,439.52 went missing from yacht club accounts between May 2015 and October 2019, according to the report.
Assistant Manager Jill Hogberg told police she believed Gallagher removed cash from the company safe before the club’s accountant completed her bi-weekly deposits.
“Since the accounting system would show the payments as received, there would be no cause for alarm because in the system, the client accounts showed they were current,” Beerbower wrote.
Hogberg and Williams confronted Gallagher about the missing money on Oct. 30.
They told police that as they were talking to him, he became nervous and “began shaking,” before admitting to them that he had been stealing money from the club.
The women said Gallagher was remorseful and said he would pay back the money he stole, according to the police report.
Gallagher submitted a resignation letter in which he said he was spending the money on prostitutes and gambling, Beerbower stated.
This story was originally published December 19, 2019 at 2:22 PM.
