ND drilling company owner doubts he'll see $690,000 embezzled from his company

BISMARCK-A woman convicted of embezzling from a North Dakota drilling contractor was ordered this week to pay more than $690,000 in restitution, but the company owner doubts he'll ever see the money.South Central Judicial District Judge James Hil...
Emergency personnel were on the scene May 3 when the school bus crashed north of Bemidji, Minn. (Submitted photo)

BISMARCK-A woman convicted of embezzling from a North Dakota drilling contractor was ordered this week to pay more than $690,000 in restitution, but the company owner doubts he'll ever see the money.

South Central Judicial District Judge James Hill ordered Melinda Strom to pay restitution to Northland Boring of Steele in central North Dakota in the full amount that prosecutors and the victim requested.

Strom, 51, a former secretary for the business, admitted in March she made unauthorized payments and transfers to herself, but disputed the dollar amount.

Hill held a restitution hearing on April 9 and ruled on Wednesday, April 18, that prosecutors and the owner of the company, Larry Magstadt, proved the total amount stolen exceeded $690,000.

"The court finds the conduct of Strom to be extensive, fraudulent, deliberate and deceitful," Hill wrote. "The court finds it was also incredibly devastating to Northland Boring."

From 2014 to 2017, Strom controlled the checks issued for Northland Boring, a horizontal drilling contractor that had an office in Bismarck but has since consolidated operations to Steele.

Strom made unauthorized payments or transfers to herself or her business, Beary Tweet and Tasty in Steele. She also controlled data entry, so some checks that appeared to be going to other businesses were actually going to Strom's bank account, Hill wrote in his ruling.

The theft was discovered in 2017 after a tax preparer noticed some discrepancies in Northland Boring's books.

Strom pleaded guilty in March to misapplication of entrusted property, a Class A felony. Hill sentenced her to supervised probation for three years after attorneys for both sides argued the sentence would give her the opportunity to pay the company back.

However, she told the judge now that she isn't working and is seeking to go on disability for back problems.

If that happens, Magstadt doubts he'll ever see much of the money.

"If it's a $100 a month, that would take a lot of time," he said. "It's a slap in the face."

"The judge was kind of upset when he found that out (about the disability) because he thought she would be working to pay back the money," said Magstadt, who added if she can't pay restitution, he would like to see her in jail.

He said the restitution should be similar to someone who owes child support. "And you know what can happen to some of those guys," he said.

In his ruling, Hill cited Marsy's Law, which says victims have the right to full and timely restitution.

Senior Assistant Burleigh County State's Attorney Julie Lawyer said prosecutors are pleased with the order, though. Strom's probation officer will work with her on a payment plan, Lawyer said.

Magstadt believes that Strom gambled most of the money away. He can't believe that she spent the over half a million dollars in that three-year period.

"I haven't been happy about how this has been handled from the beginning," he said.

After the hearing in March, Magstadt said his business that once employed 13 people was struggling to survive after the theft and the slowdown in the oil industry. He was back working, however, on Thursday when he gave a phone interview.

Defense attorney Bobbi Weiler said she and her client had no comment on the restitution order.

 Dalrymple is a reporter for the Bismarck Tribune, while Amundson works for Forum News Service