Former employee embezzled $1.8 million, Modesto business alleges in lawsuit

A Modesto business alleges in a lawsuit and other court records that its former accounting office manager embezzled at least $1.8 million and is believed to have used the money to fund an extravagant lifestyle, including buying Harley-Davidson motorcycles, new cars and season tickets to San Jose Sharks, Oakland A’s and Las Vegas Raiders games.

Attorneys for Stainless Distributors filed the lawsuit Jan. 5 in Stanislaus County Superior Court against Kelly Bradley, 50, who the lawsuit states lives in Merced County. The lawsuit also names her husband, Chad, as a defendant, as well as other unnamed defendants.

The Stanislaus County District Attorney’s Office filed one charge of embezzlement and one charge of money laundering against Kelly Bradley on Jan. 25, with the enhancement that the amount of the money laundered was $1 million to $2.5 million.

Has pleaded not guilty in criminal case

Bradley pleaded not guilty Tuesday and is not in custody after posting $10,000 bail in January. She declined to comment Wednesday about the civil and criminal allegations.

But the attorney representing her in the lawsuit filed a response in court, claiming among other things that Stainless Distributors was careless and negligent, which caused and contributed to any damages it may have sustained, and is barred from relief because of the company’s allegedly “unconscionable behavior.”

Stainless Distributors is the second Modesto business to recently be rocked by allegations of embezzlement.

Boyett Petroleum — which delivers gasoline and diesel to 700 to 800 gas stations from California to Oklahoma — filed a lawsuit Feb. 15 against its former marketing director, Anne Benisch, alleging she used her company American Express card to make $1 million in unauthorized purchases over five years, including women’s clothes, shoes, apparel, beauty products, food, rent, utilities and housecleaning.

Two law enforcement agencies are investigating embezzlement allegations involving two former Boyett employees. The Modesto Police Department has confirmed it is one of the agencies. Benisch, 35, has not responded to requests for comment.

Stainless Distributors is a family-owned small business and, according to its website, supplies “fluid handling products” including pipes, valves and pumps for industrial uses, including the food service and dairy industries.

Stainless Distributors hired Bradley in 2009 as its accounting office and credit manager, according to court records, which also state she was the company’s bookkeeper. Court records state her duties included processing and paying bills and managing the company’s accounting records.

Those records included the disbursement journal “that tracks check numbers, the vendor who the check was sent to, the date the check was sent and the amount of the check.”

Court records allege Bradley embezzled the money by writing checks to Double B Livestock, a livestock hauling business owned by Bradley and her husband. The checks were made out to B&B, B&B Inc., Double B and B&B Hauling.

Bradley allegedly covered up the checks by entering false information in the disbursement journal, stating the checks were paying bills from legitimate Stainless Distributors’ suppliers and vendors, according to court records.

At doctor’s office when bank called

Stainless Distributors CEO and co-owner Scott Encerti wrote in court records that he discovered the embezzlement Jan. 4 when a Bank of Stockton official called him because the company did not have enough money in its account to cover some checks, including one for $21,675 written to Double B. He wrote that Double B is not one of his company’s vendors or suppliers.

Encerti wrote Bradley normally would have taken the call but was out of the office for a doctor’s appointment. Encerti wrote the bank held the check and he spoke with Bradley when she arrived at work. He alleges Bradley admitted writing the check and offered to cover it with proceeds from her 401(k) retirement account if he would not call law enforcement.

He also alleges that when he asked her whether she had done this before, Bradley would not answer unless he agreed not to call law enforcement. Encerti wrote that he called the Sheriff’s Department.

The Bank of Stockton searched Stainless Distributors’ bank records and found $1.86 million in checks written to Double B, B&B, B&B Inc., Double B or B&B Hauling from May 2019 through December 2023. Court records allege the loss could grow as more records are searched. The lawsuit alleges Bradley deposited the checks in her and her husband’s account at Farmers and Merchants Bank.

Encerti wrote that because of the alleged embezzlement, Stainless Distributors “has suffered financial hardship over the past couple of years. Stainless lost money as it was spending more to operate than it was able to generate in profit. Now we have discovered the reason it lost money ... .”

The lawsuit seeks to recover the embezzled money, as well as damages, and seeks temporary and permanent orders barring the spending, withdrawing and transferring of the stolen money.

Encerti did not return a request made through an employee seeking comment. Attorneys representing Stainless Distributors and Bradley in the lawsuit did not respond to requests for comment.