Minnesota Romance Scam Victim Woman Charged with Embezzling Millions from Business and Exploiting Vulnerable Adult
Sharon Ann Schmalzriedt, 61, of Wabasha, Minnesota, a romance scam victim, faces serious criminal charges after allegedly embezzling over $3.75 million from a Lewiston business and stealing $17,150 from a vulnerable adult in her care. The funds, intended for business accounts and nursing home fees, were funneled to an online stranger.
Court documents reveal a months-long scheme that began in October 2019 where she stole and gave the money to her romance scammer.
Schmalzriedt, working remotely as the business’s bookkeeper, enjoyed trust and access to its finances. However, alarm bells sounded in May 2023 when the owner noted suspicious transfers to unfamiliar organizations – some even sharing routing numbers. An external audit confirmed the worst: Schmalzriedt had been systematically siphoning off millions.
When confronted, Schmalzriedt confessed to the embezzlement and admitted deleting transactions to cover her tracks.
Her motive? An online romance with a man named Erik Lockwood, who allegedly claimed he owed millions but needed US currency to access it. Schmalzriedt, caught in a web of deception and desperation, tapped into both her own funds and the business’s coffers, even neglecting the financial needs of a vulnerable adult under her care.
On December 20, Wabasha County Court charged Schmalzriedt with two counts: theft exceeding $35,000 and financial exploitation of a vulnerable adult exceeding $5,000. This case serves as a stark reminder of the potential pitfalls of online relationships and the devastating consequences of misplaced trust, both in business and personal settings.
According to ABC75 News
A Wabasha woman is facing criminal charges after allegedly embezzling over $3 million from a business and over $17,000 from a vulnerable adult in her care to send to a man she met online.
Sharon Ann Schmalzriedt, 61, was charged in Wabasha County Court on Dec. 20 with one count of theft over $35,000 and one count of financial exploitation of a vulnerable adult over $5,000.
A criminal complaint states that on April 17, agents with the Minnesota Bureau of Criminal Apprehension (BCA) were asked to assist in an investigation into a Lewiston, Minn. business that was defrauded out of millions of dollars.
The owner of the business told law enforcement that Schmalzriedt, a bookkeeper working remotely for the business, had embezzled over two million dollars since October 2019.
During her employment, Schmalzriedt was responsible for payroll, paying vendors, and maintaining the businesses’ financial records, according to the owner.
The owner of the business said he hired an outside firm to look into the business’s financial records after noticing multiple transfers of cash to organizations the business did not work with, some of which listed the same routing numbers for multiple businesses.
The complaint states that on Feb. 14, the owner asked Schmalzriedt to supply copies of the business ledger within two weeks. After two weeks, Schmalzriedt asked the owner for more time to provide copies. After reviewing the work Schmalzriedt had been doing, the outside firm found that she was deleting multiple payments from the business’s ledgers.
Schmalzriedt was fired from the business on March 31 for gross negligence, according to court records.
Agents with the BCA determined that the business lost $3,751,337 since the transactions began in October 2019.
In May, law enforcement officials interviewed Schmalzriedt, who told them that she had been having marital problems in October 2019 when she began an online relationship with a man named Erik Lockwood.
Lockwood allegedly told Schmalzriedt that he was owed $7 million from work he completed in Dubai, but he needed to borrow U.S. currency to acquire the money, according to the complaint. Lockwood told Schmalzriedt he would repay her for the money.
Schmalzriedt first began sending her own money, and then money she had permission to borrow from the business’s owner. However, Schmalzriedt started transferring money to businesses associated with Lockwood that the owner was not aware of.
While speaking with law enforcement, Schmalzriedt admitted she did not have permission to transfer the money and that she knew it was wrong. She also admitted to deleting transactions to hide the money transfers from the business’s owner.
Schmalzriedt told agents with the BCA that she had also taken $17,150 from a vulnerable adult in her care, which was meant to go to the victim’s nursing home.