Agent says Ryan’s banking activities indicated fraud
Post Independent Staff
Glenwood Springs, CO Colorado
GLENWOOD SPRINGS, Colorado – Accused thief Shawnee Ryan’s banking records convinced state fraud investigator Ken King that she was committing fraud while running an interior design shop, King testified during Ryan’s trial on Friday.
And Ryan’s daughter, Brynn Hays, testified that she worked at her mother’s store for about a year, then quit because her paychecks stopped coming and she was growing “uncomfortable” over her mother’s business practices.
Now living in Denver with her husband and child, Hays said she has cut off contact with her mother over concerns about how the business, Duir Designs at the Glenwood Meadows shopping center, was being run.
“I felt like I was used, and something wasn’t right,” Hays told the courtroom.
Ryan, 55, is accused of bilking as many as 40 different customers and suppliers out of thousands of dollars over several years, while she ran a series of interior design shops in the Roaring Fork Valley.
Defense attorney Kathy Goudy, however, said in her opening statement on Aug. 7 that Ryan is guilty of no more than being a poor businesswoman and exercising bad judgment.
Initial charges against Ryan, filed in May 2010, include six counts of felony theft based on a year-long investigation by local and state authorities.
Ryan also was charged in September 2010 with check fraud and violating bail bonds conditions, after she was arrested for allegedly bouncing a check while awaiting trial on the original charges.
Ryan remains free on a bond of $38,000.
In court on Friday, Special Agent Ken King of the Colorado Department of Revenue said he reviewed records from three different institutions – Alpine Banks, Community Banks of Colorado and US Bank – focusing on accounts held by Ryan and her children, Brynn Hays and the late Alex Ryan.
King described a series of transactions in which Shawnee Ryan allegedly ran checks from the business through her children’s accounts, which Hays also testified as being a common occurrence.
“She said she couldn’t get a bank account and needed my help,” Hays said. She explained that she worked in her mother’s store for about a year as a clerk, cashier and general “shop girl,” being paid about $600 per week.
Hays said she initially thought nothing of the banking arrangement, explaining, “She was my mother.”
But King said such arrangements are not a normal way of doing business.
He explained that typically, business owners are careful to separate their business and personal accounts. His review of Ryan’s activities revealed “oddities needing clarification.”
According to King’s testimony, hundreds of thousands of dollars were funneled through the children’s accounts. Often the checks were written by clients to either the business or to Shawnee Ryan, then countersigned over to one of the children’s accounts.
Hays testified that she often would then turn around and give her mother cash or another check, written for the amount of the deposit.
King interviewed Hays in January 2011, and he told the court, “I don’t believe she was involved in any fraudulent activity.”
He was unable to interview Alex Ryan, who committed suicide in September or October 2010 at the age of 22, which was just before he was called to begin investigating the case.
“My understanding is, he had no involvement with the company,” King testified.
King said one indicator of possible fraud was that many of the checks in question were for even-dollar amounts, which he said is not normal in typical business accounts.
“A lot of these transactions or movement of money had no legitimate business purpose,” King said.
In cross-examining King, defense attorney Kathy Goudy pointed out that he did not review a number of other accounts held by Shawnee Ryan and Duir Designs at several other banks that he didn’t mention.
King said he had been asked to review only those accounts believed to have been directly involved in the theft charges, and that those accounts were at the three banks named.
Goudy repeatedly brought up other accounts that, although they were held by either Ryan or the business, were not examined by King.
Prosecutor Andrea Bryan objected, questioning the relevance of Goudy’s questions.
Goudy answered, “The credibility of this expert is in question here as to the scope and depth of his investigation.”
Allowed to continue her line of questioning, Goudy also noted that Ryan had declared bankruptcy in 2010, and that King had not inspected those records.
In follow-up questioning by prosecutor Bryan, King said bankruptcy records are based on information provided by the bankrupt party, are occasionally subject to fraudulent filings, and cannot easily be verified as accurate and true.
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