Starbucks suit outlines alleged fraud

A former Starbucks employee was able to funnel millions of dollars from her employer to a dummy consulting firm by approving payment after payment to the phony company, even after being questioned by her supervisor, according to information contained in the civil suit filed by Starbucks.

The woman, Rosemary Heinen, and her husband, Gerald, both 51, were arrested earlier this week in connection with the theft of $3.7 million from Starbucks, but they have not been charged with a crime.

They were released Tuesday after King County prosecutors said they needed more time to review the case.

Nonetheless, on Sunday, King County sheriff's deputies, acting on a court order and as part of the ongoing criminal investigation, seized hundreds of thousands of dollars of goods from the Heinens' Bellevue home, which is shared with their teenage daughter.

The civil suit, filed last week in King County Superior Court, seeks to recover damages from what Starbucks says was a fraudulent scheme Rosemary Heinen starting running in late 1999.

In its suit, Starbucks also is seeking a judge's order to bar the couple from selling or removing their property, arguing that the Heinens are likely to do so, in an attempt to defray their creditors.

According to the suit, the Heinens, who declared personal bankruptcy in 1997 with nearly $680,000 in liabilities and assets of less than $400,000, recently bought a 47-foot yacht, 15 cars and a motorcycle.

The Heinens could not be reached for comment.

According to a statement from her former supervisor, Jonathan Engle, Rosemary Heinen supervised a dozen employees and was responsible for overseeing various projects.

Shortly after being hired in November, she forged her supervisor's signature on a consulting-services agreement, which enabled Heinen to begin drawing Starbucks funds to pay RAD Consulting Service, according to Engle's statement, which is contained in the lawsuit.

Heinen approved payments to RAD Consulting, a fictitious business set up by the Heinens, for services that were never rendered, even as her supervisor grew more suspicious, according to the lawsuit.

"I repeatedly asked Heinen to tell me more about these charges, including what work was being performed, the identity of RAD Corporation, and other information," Engle said in his declaration filed with the suit.

"Heinen was evasive and never satisfactorily answered my questions. I also repeatedly asked Heinen to introduce me to the RAD employees named on the invoices, including `Mary Rockey' and `Doug Leary.'

"Heinen repeatedly assured me that these people existed, but I never met them. Heinen told me on more than one occasion that these people were working off-site and rarely came into Starbucks, or that I had just missed them, either in the office or on the phone."

In all, Rosemary Heinen approved payments that totaled more than $3.7 million, charged to various Starbucks accounts, the lawsuit alleges.

Engle said Heinen asked that some of the checks be sent using special handling instructions, but added that in at least one case, Heinen personally picked up a check for RAD in the amount of $246,000.

According to information contained in the suit, Rosemary Heinen was authorized to approve payments for amounts up to $5,000.

The suit also contends that the Heinens attempted to cover up the scheme by unsuccessfully attempting to enter the company building after hours. When they were denied access, Rosemary Heinen asked a co-worker to delete files from Rosemary's computer and remove items from her cubicle, according to the suit.

Joshua Robin's phone message number is 206-464-8255. His e-mail address is jrobin@seattletimes.com.