Wednesday, November 22, 2017
Business

Cash stolen from TradeWinds resort used for luxuries, male enhancement

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ST. PETE BEACH — A $274,000 home in Tarpon Springs. A $200 pair of Giorgio Armani sunglasses. And $86.95 worth of male enhancement pills.

Those were just some of the things bought with more than $782,000 that two ex-employees embezzled over five years from the TradeWinds Island Resorts, according to the Pinellas County Sheriff's Office.

Sam Baage, 58, was the TradeWinds' chief financial officer. Harold James, 46, was its director of information technology. Both were arrested Wednesday on 15 counts of grand theft, two counts of money laundering and one count of conspiracy. They are accused of using the money to lead "very comfortable lifestyles," also spending it on meals, jewelry and online dating websites.

TradeWinds president Keith Overton said he knew both men for five years before the resort first reported its suspicions to authorities in November 2011. By February 2012, both men were fired.

"I knew them well," Overton said Thursday. "I had a working relationship with them. I think like everybody else here, I'm in shock."

The Tampa Bay Times obtained James' 57-page arrest warrant, which details how detectives said the two phonied up expenses and tricked the TradeWinds into paying fictitious businesses and accounts that they actually controlled, sometimes using the names of family members — even children.

The warrant focuses on James' role, showing how many of the false businesses and PayPal accounts were traced back to him, his bank accounts, his home addresses — even his parents, his kids and a cousin.

The arrest warrant for Baage was unavailable Thursday, but his name appears frequently in James' warrant. They even texted back and forth about the scheme, according to James' warrant, using their company cellphones.

Sometime last year, while left alone in a sheriff's interrogation room, James texted Baage a warning: "trouble."

The TradeWinds accounting director told the Sheriff's Office that a department director must review and initial approval of every invoice the hotel pays. But she said James personally picked up the checks made out to two vendors, Direct Tech and Vam Inc., because he "claimed that it was urgent that these vendors receive payment."

She could not recall James picking up checks for any vendor other than Direct Tech or Vam Inc. Both businesses were tied to James, the warrant said, and both shared the address of a Leesburg carwash. Direct Tech received about $403,000 and Vam took in nearly $187,000, the warrant said.

The warrant has some examples of what James said he was buying and what authorities said he actually bought:

The TradeWinds' American Express account was billed $82.85 for what the receipt said was an "IP/serial remote pwr switch" on June 15, 2011. But according to PayPal records, it actually went to 12 mother of pearl caviar spoons.

An Aug. 11, 2009, purchase using the American Express account listed two pairs of protective eye glasses. But PayPal records show it actually went to pay for a pair of Giorgio Armani sunglasses delivered to James.

On July 17, 2008, the credit card was used to buy 100 packs of Tylenol for $86.95. But it actually went to a male "sexual enhancer" called Zyrexin delivered to James.

The TradeWinds has filed a claim for the losses with its insurance company, Overton said, and while the lost money did not impact operations, it hurt the company's shareholders.

One thing that didn't surprise Overton was that Baage was working as CFO for another resort in Miami Beach, where he was arrested.

"It never ceases to amaze me in our business how many in our community don't do thorough reference checks," Overton said.

Detectives are unsure of James' activities since he was fired, but according to court records he applied for unemployment benefits.

James is a flight risk, the warrant said, and is being held in the county jail in lieu of $735,000 bail. He faces a maximum of 220 years if convicted of all charges, according to the warrant. It was not known when Baage would be brought back to Pinellas County.

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