Lawyer: 'Severe economic stress' caused restaurateur to embezzle $1.3M

Financial troubles and the prospect of those difficulties leading to the break-up of her family drove Soozi Folsom, the owner of a Saugatuck dining institution, the Mansion Clam House, to embezzle more than $1.3 million from three local charitable foundations, her lawyer told the Westport News on Wednesday.

"She was in severe economic stress that followed the economic downturn in 2008," said Folsom's lawyer, William Westcott. "She made a terribly desperate decision to misappropriate funds. Like so many people who do that, she'd thought she'd be able to repay the funds. As is usually the case, that was unrealistic. Before she knew it, it got out of control. She really wishes she had the strength to do something different, instead of how it turned out."

Folsom, 54, pleaded guilty Monday in Hartford to one count of bank fraud for embezzling from the three foundations while she worked as the financial manager at the Westport-based accounting firm Gunn Godfrey & Allison. From approximately September 2008 to November 2011, Folsom wrote at least 124 fraudulent checks drawn on the bank accounts of the foundations and made payable to "Groundhog LLC," David Fein, the U.S. attorney in Connecticut, said in a statement Monday.

Groundhog LLC is the firm that owns the Mansion Clam House. Folsom is a principal in Groundhog LLC, along with her wife, Inger-Lise Holen, and Mansion Clam House executive chef Rigo Lino, according to the Connecticut secretary of the state's records.

Folsom forged the signature on the fraudulent checks, signing the name of an individual with signatory authority on the foundations' bank accounts, and then converted the money to her personal use, Fein said. Folsom covering up the fraud by manipulating transactions in the accounting software systems that handled the foundations' accounting and bookkeeping, according to the statement.

"Her business was not doing well, and she was personally distraught over it as a result that a failed business could cause her partner of 11 years to no longer remain in the country," Westcott said. "It was not motivated by any greed or desire to live a lavish lifestyle."

Westcott declined to specify whether the business to which he referred was the Mansion Clam House. The extended visa privileges of Holen, a native of Norway, were linked to business interests she shared with Folsom, the lawyer added.

Anticipating that her visa would not be renewed, Holen moved back to Norway with the couple's two children in April, according to Westcott.

Folsom's conviction was a precipitous downfall for a prominent Westport restaurateur.

Under a late-summer sun last Saturday during the Slice of Saugatuck Festival -- just two days before she pleaded guilty -- she spoke with the Westport News enthusiastically about the popular event.

"I love it," she said of the festival. "I think it's grand. It just brings people out. Saugatuck was dead for many years, and it's just nice to have people back in the neighborhood to show them it's alive again."

Westcott did not disclose where Folsom is being held since her guilty plea.

She is scheduled to be sentenced Dec. 7. She faces a prison term of between 41 and 51 months.

Folsom was remanded Monday to the custody of the U.S. Marshals Service, in part because she transferred approximately $62,000 out of the country while she was aware that federal authorities were investigating her.

Westcott confirmed that Folsom had transferred those funds, stating that they were used to support Folsom's wife and children in Norway.

Folsom informed authorities through legal counsel first-hand that she had transferred the money "because she didn't want anyone to think that she was doing it for anything other than to support for her family," Westcott said.

Folsom's embezzlement did not involve any other Mansion Clam House employees nor did any of them know about the illicit activity, according to Westcott.

Messages left for Gunn Godfrey & Allison, which shares the same business number with the Prentice Foundation and Ettinger Foundation, as well as for the Educational Foundation of America, were not returned.

Lino, the executive chef and co-owner of the Mansion Clam House, could not be reached for comment.

The three foundations defrauded by Folsom together reported more than $200 million in assets in their 2010 annual reports, the most recent available. The approximately $1.4 million embezzled by Folsom was more than the total grants awarded in 2010 by either the Prentice or Ettinger foundations.

pschott@bcnnew.com; 203-255-4561, ext. 118; twitter.com/paulschott