STEELE, N.D. (AP) - A North Dakota drilling company is struggling to stay in operation a year after the owner learned a secretary made unauthorized payments to herself.
Larry Magstadt is the owner of Northland Boring LLC, a Burleigh County contractor that does horizontal directional drilling. Magstadt said he lost nearly $700,000 to former employee Melinda Strom, who wrote checks and transferred money to herself and her business without permission.
Strom, 51, pleaded guilty March 9 to a felony charge of misapplication of entrusted property in Burleigh County District Court, the Bismarck Tribune reported . She admitted only that the amount exceeded $50,000.
Court records show unauthorized checks totaling about $200,000 written to Strom and her business, Beary Tweet & Tasty, from December 2014 to March 2017.
Assistant Burleigh County State’s Attorney Marina Spahr said prosecutors believe there were more unauthorized payments totaling near $700,000.
A hearing is scheduled for April 9 to decide how much Strom will be ordered to pay Magstadt in restitution.
Magstadt said he’s close to losing his business, which has also been affected by an industry slowdown. At the height of the oil boom in North Dakota, Northland Boring employed 13 workers. Magstadt said he recently bought out his last partner so the company only employs himself and his brother.
“It’s going to be a struggle,” Magstadt said.
Defense attorney Bobbi Weiler said Strom had a drug addiction that played a part in her “bad thinking at that time.” Weiler said Strom stopped using drugs more than a year ago. Weiler and her client didn’t have any comment after the hearing.
Strom has been ordered to serve three years of probation.
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