Dee Dee Hubbard not guilty

By Margaret Morton

Leesburg Today

Nov. 8, 2011

After a two-day trial and one hour and 40 minutes of deliberation Tuesday afternoon, a Loudoun jury found Middleburg Eccentric editor and founder of Middleburg Online Deanne “Dee Dee” Hubbard not guilty on charges that she used her position as a property manager to embezzle funds.

While Deputy Commonwealth’s Attorney Stephen Sincavage told jurors the evidence showed that Hubbard intentionally deposited rent checks totaling $9,100 into other bank accounts she controlled, defense attorney Edward MacMahon argued the six instances where the rent checks she collected and checks from Hubbard’s businesses were comingled in deposits to bank accounts she controlled. The funds were repaid when the errors were discovered, MacMahon said.

The high profile case involved two well-known individuals in Middleburg, Hubbard and property owner Jack Goehring, for whom Hubbard had served as a property manager for 20 years. When Hubbard was charged with 15 counts of felony embezzlement and arrested outside her office Nov. 30, 2010, it sent shock waves around the Middleburg community.

Goehring and his partner John Bennison had hired Hubbard for more than 20 years as the property manager for the real estate partnership they shared. In 2007, after the two men dissolved their partnership, both continued to use Hubbard as property manager for their separate companies, but Goehring also gave her additional responsibilities as his bookkeeper for two rental properties owned by his Piedmont Standards Corporation.

Bennison, however, did not turn over the financial reins to Hubbard but continued to manage the accounts, as he had done during the partnership.

Bennison testified that during the partnership, Hubbard would deposit the rent checks, sending him a copy of the deposit slip. There were sometimes mistakes in the deposits during that period, he said, but they all were “correctable.”

Hubbard was accused of depositing 14 rent checks, made payable to and endorsed to Goehring’s Piedmont Standards Corporation, not into his account at Middleburg Bank but into her Middleburg Eccentric and Middleburg Online accounts at the same bank on six different occasions.

The errors came to light, Goehring’s wife Mary Kirk Goehring testified, when she and her husband, who live in McLean, began paying closer attention to their Middleburg affairs. “We needed to know what was going on out there,” she said. At first, she said, when she received the rental records and check register from Hubbard, whom she agreed willingly and readily made them available, she thought the records were just confusing.

Later, however, as she and her accountant Rosa Hernandez began delving into the situation more fully so they could put the accounts on QuickBooks it appeared they were missing crucial information, some of which had to be obtained directly from the bank. Further on into their investigation, Mary Kirk Goehring testified, they found the errors. It was later still that she said she discovered larger amounts were missing and claimed a renter, not Hubbard, had forged her husband’s signature on more than 170 checks. The couple has sued Hubbard several times over this past year, claiming hundreds of thousands of dollars are missing.

Because there were errors also on the part of a bank teller, who did not catch the contradiction between the endorsed payee and the name on the account deposit slips and deposited the funds in the wrong accounts, the Middleburg Bank offered to reimburse the $9,100, but the Goehrings did not accept that solution.

Testifying in her own defense, Hubbard, as she reviewed the disputed checks with her attorney, painted a picture of a complex and somewhat chaotic business relationship with Goehring during which she managed leases, collected rents and deposited them, made arrangements with contractors for various construction projects, sometimes used her own personal, or her companies’ checks to pay for items for the rental units and then sought reimbursement. She said at one point Goehring had asked her to hold several rent checks until the next tax year, which she did.

Goehring, when he took the stand, admitted his financial oversight was “minimal,” but said he had been friends with Hubbard for 20 years and had “blind trust” in her. He also later wrote Sincavage that he felt “betrayed” by Bennison.

Sincavage sought to show that the deposits-which Hubbard said she greatly regretted and were in part caused by a disorganized office and confusion in managing nine different accounts-were part of a deliberate attempt to defraud Goehring of his rental money.

Hubbard’s accounts at several periods showed empty or negative balances, Sincavage said, claiming her need for money for her businesses and the opportunity provided by Goehring’s lax financial oversight in comparison with Bennison’s tight control were behind what he called a deliberate attempt to defraud Goehring and his wife.

Sincavage said there was a clear pattern of fraud when all the facts were considered.

MacMahon dismissed that claim, noting that Hubbard, when confronted with the errors, “immediately” acknowledged her responsibility and rectified the situation, even overpaying on one occasion.

MacMahon cited Goehring’s conflicting and erratic testimony, both during the trial and during the March preliminary hearing in General District Court. He accused Goehring of being “obsessed” with Hubbard and her family, noting he had sent extensive letters and emails to Sincavage asking for more charges to be brought against her and even urging him to indict her family because “they were her most vulnerable assets” in an attempt to get her to plead guilty. He also in those communications with Sincavage called the Hubbards “a crime family.”

Despite that allegation, MacMahon said, Goehring had recently completed two-year renewal leases with both Hubbard solely for Middleburg Eccentric and with her son Jay Hubbard for Middleburg Online as well as with her daughter Lisa Hubbard Patterson, owner of Mello Out restaurant, which is housed along with the two businesses in Goehring’s corner building on South Madison and Federal streets.

Noting Hubbard’s desk “is a mess,” with deposit slips all over the place, MacMahon agreed that all of the disputed checks were written to Piedmont Standards, and endorsed, but “there is no evidence she embezzled any of those checks,” or had any intention to embezzle, MacMahon said.

MacMahon also accused Goehring of being in collusion with the Middleburg police, who arrested Hubbard in an unusually public fashion. “Goehring called a photographer to be there; he knew, and the police lured her there, handcuffed her and took her outside” where the photographer took pictures of Hubbard being led away and then tried to sell the photographs “to humiliate her.” The photographs later appeared on the front page of the Loudoun Times Mirror, which purchased them for $200, according to MacMahon.

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