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Kafka avoids jail

Veronica Whitney

A judge Friday sentenced the former chief financial officer of a local general contractor to 20 years probation for embezzling $2 million from the company.

Eagle County District Judge Tom Moorhead also ordered Karen Sue Kafka, 46, who now lives in Henderson, Nev.,to pay $864,000 in restitution to Sandy and Kathy Treat, owners of Edwards-based Summit Habitats.

Kafka was charged with one count of theft, a class-4 felony that carries a possible penalty of two to six years in jail, a fine of $2,000 to $500,000 and a mandatory three years of probation.



Kafka was convicted of embezzling $2 million over a five-year period from Summit Habitats. She was arrested last summer after an investigation that lasted about a month.

Kafka already has paid the Treats back $1.5 million.



“I hope you’ll use this opportunity to turn your life around,” Judge Moorhead told Kafka after giving his sentence. “We’re putting our faith in you; and only your actions in the future will say if justice was served today.”

“I’m really sorry’

Although the probation office had recommended Kafka serve a year in prison, District Attorney Mark Hurlbert asked for 20 years probation and payment of restitution, instead.



“She’s been up front from the beginning, taking responsibility,” Hurlbert told the judge. “I’ve never seen a defendant taking as much responsibility as Ms. Kafka has.”

Sandy Treat said Friday he was satisfied with Moorhead’s decision. Hurlbert said the Treats had agreed to a sentence without jail time.

“I hope in my heart that she can do it,” Treat said. “This has had a huge impact on us and the business.”

In addition to restitution, the conditions of the probation include that Kafka:

– Continue with psychotherapy – she has been seeing a therapist since the embezzlement was discovered.

– Perform volunteer service in the community where she lives eight hours a week, sending the court a written report every six months.

“In the event you don’t follow the terms of the probation, you can face years in prison,” Moorhead told Kafka.

Before the sentencing, Kafka told the judge she was sorry she had betrayed her former employer’s trust, as well as her own family. Kafka wore to court a light blue cotton sweater, black pants and a tidy blond bob. She appeared calm until she spoke.

With tears in her eyes, standing in front of the judge and by her attorney, Inga Haagenson Causey, Kafka faced her former employers and said:

“I damaged the life of many people. I loved the people I betrayed. I love my family, my employers and other company employees.

“I came very close to losing everything that is important to me,” she said. “I’m committed to be a better person. I would like an opportunity to continue rebuilding my relationships.”

Kafka said she’s been volunteering at a school in Nevada twice a week, helping immigrant children learn English.

“This work has been rewarding and therapeutic,” Kafka said. “I’m trying to rebuild the trust that people had in me.”

A denial process

When Judge Moorhead asked Kafka about her mental process while she embezzled the money.

“It was a denial process,” Kafka said. “When I stopped the activity, I felt that the spending had gone out of control. However I couldn’t go to them (the Treats). They came to me.”

Kafka said she stopped taking money in November 2001; Sandy Treat confronted her in February 2002.

Kafka, who was out of jail on a $100,000 bond, confessed to writing more than 500 unauthorized checks on Summit Habitats accounts to pay for the construction of two houses in Cordillera – which she and her husband, Greg, owned – and to buy a home in Fort Collins, according to the affidavit.

Kafka was caught when Sandy Treat and another company employee began auditing Karen Kafka’s work, the affidavit says. They uncovered approximately $2 million in embezzled funds at the hands of Kafka, who was fired from her job in February 2002.

In the affidavit, Karen Kafka said none of what happened was her husband’s fault. Greg Kafka also worked for the company at one point.

In a phone conversation between Kathy Treat and Karen Kafka, when Treat asked Kafka why she had done it, Kafka answered: “If I could come up with a reason, it was for greed.”

Moorhead asked Kafka how it was possible that her family didn’t know what was going on.

“My family never questioned me,” she said. “I handled all the finances. There was no reason for them to have doubts. They trusted me.”

Veronica Whitney can be reached at 949-0555, ext. 454, or at vwhitney@vaildaily.com.


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