SANTA ANA, CALIF. –The former controller of a company that provides supervision services, including electronic monitoring programs, to courts and probation departments was sentenced to three years and a month in prison after he plead guilty to federal charges of embezzling well over $3 million from the company over the course of two years, officials said
U.S. Judge David O. Carter also ordered Steven A. Hagstrom to pay $2.1 million in restitution, a figure less than the amount of money embezzled because Sentinel previously was able to recover some of the money, officials said.
Hagstrom, 37, of Anaheim, was an accountant and then controller of the Irvine-based Sentinel Offender Services, LLC.
“Hagstrom’s theft of such funds jeopardized the proper operation of the criminal justice system,” prosecutors wrote in a sentencing memorandum filed with the court. “Beyond just losing the money, Sentinel might have lost contracts with the government agencies that retained Sentinel due to its failure to safeguard their funds.”
Hagstrom used the money to gamble at casinos in California and Las Vegas, his lawyer told the Orange County Register newspaper last year.
“He kept thinking that he was going to win it back and he would pay it back and no one would be the wiser,” Defense Attorney Diane Bass said. “But of course, that’s not the way it works with gambling.”
As controller of Sentinel, Hagstrom had access to Sentinel’s bank accounts where fines, court fees and restitution payments from criminal defendants were held in trust.
The accounts also held money paid to Sentinel for services provided to state and federal court systems.
Beginning in early 2012 and continuing until April 2013, Hagstrom transferred approximately $3.3 million from Sentinel’s bank accounts to bank accounts he controlled, where they could be used for his own benefit.
The investigation into Hagstrom was conducted by the FBI and the IRS.