UPDATE: A former bookkeeper who embezzled millions of dollars from a major literary agency has been sentenced to two years in federal prison.
Darin Webb was convicted of stealing from the New York-based firm of Donadio & Olson. The firm represents authors James Hynes, Chuck Palahniuk and Rick DeMarinis, as well as the estates of Robert Stone, Mario Puzo, Frank Conroy, Nelson Algren, Peter Matthiesen and Studs Terkel.
“This chain of events leaves me close to broke,” Palahniuk said in court papers. “Since the crime was uncovered, people have offered their children’s college funds. They’ve offered to mortgage their houses to keep me afloat. They’ve come forward with legal advice and stop-gap, hands-on help.”
Palahniuk lost more than $1.4 million in royalties and advances in Webb’s theft, estimated at more than $3.4 million from the agency. Donadio & Olson was forced to file for bankruptcy last month.
“Webb’s actions have irrevocably ruined our company’s reputation and left us insolvent,” wrote Edward Hibbert, one of the firm’s principals, in an impact statement to federal Judge Edgardo Ramos.
Other victims were equally hard hit. Heirs to Puzo’s estate lost more than $757,000 in royalties, while survivors of Catch 22 author Joseph Heller didn’t receive $35,665. The Edward Gorey Charitable Trust lost nearly $60,000, according to bankruptcy filings.
“At the point the theft was uncovered, the agency’s bank accounts were virtually empty,” agency principal Neil Olson told the court. “The cost of aggressively pursuing the thief was enormous … He has destroyed our business, a prestigious agency that endured for decades.”
Webb, 48, managed the firm’s books for nearly 20 years, but only began his thefts seven years ago. His malfeasance was discovered when Palahniuk called the agency when he did not receive a $200,000 payment owed from his publisher.
Webb’s attorneys claimed the stolen funds were used to cover expenses from Webb’s own accounting firm, SUM Innovation.