No-Contest Plea Entered in Case of Insurance Embezzlement

The former office manager of Harbor Insurance Agency and her husband pleaded no contest Wednesday to charges that they embezzled $34,000 from the San Pedro firm and its owner, Bernard O’Neal.

Georgia Mulchahey, 59, and her husband, James, 64, entered the plea in Long Beach Superior Court to one count each of grand theft.

The Mulchaheys will face up to four years in prison when they are sentenced Sept. 20 by Judge Richard F. Charvat, although the prosecution and defense lawyers agreed it is more likely that the couple will receive shorter jail terms or probation. They also could be ordered to make restitution.

The fraud began in 1987, shortly after O’Neal promoted Georgia Mulchahey from bookkeeper to office manager. O’Neal, 87, said he became suspicious when Mulchahey began asking him to withdraw money from his personal bank account to cover the agency’s operating expenses.

Started Business in 1933

O’Neal, a Texas native who opened shop in San Pedro in 1933, hired an accountant to investigate.

According to testimony at the Mulchaheys’ preliminary hearing, Georgia Mulchahey used her position in O’Neal’s firm to help her husband open a competing San Pedro firm--Marina General Insurance Agency. She used $9,000 of O’Neal’s money to buy office supplies, a computer system and a street sign for Marina General. And she wrote a check for $10,000 to her husband’s company and deposited O’Neal’s personal draft for $15,000 into her own account, testimony showed.

Deputy Dist. Atty. Glenn Sommers said subsequent investigation has revealed that $100,000 more of O’Neal’s money is missing.

Charvat could order the Mulchahey’s to pay restitution and fine them up to $10,000, in addition to prison terms. A hearing would be held to determine the amount of restitution.

The Mulchaheys’ licenses to sell insurance were automatically revoked when they entered their pleas, Sommers said.

The deputy district attorney said he will ask the judge to send the couple to prison, because of a previous case of fraud.

License Revoked

In 1978, an administrative law judge ruled that the Mulchaheys had improperly kept $8,000 in premiums that they collected through a Torrance insurance agency. The couple did not face criminal charges in that case, but James Mulchahey had his license revoked and his wife had her license suspended.

James Mulchahey sold real estate until August, 1987, when the state Department of Insurance reissued him a license to sell insurance. Five months later, he opened his San Pedro firm, with the aid of Bernard O’Neal’s money.

The Mulchaheys and their lawyers did not comment Wednesday, avoiding reporters by leaving the courtroom through a side door.