Whittingham Stable Missing Funds : Horse racing: Investigation shows he may have lost up to $2 million that was paid to non-existent employees from payroll accounts.

Evidence that a race track hotwalker, who might normally earn $150 a week, was paid $12,000 a month is part of an investigation that may eventually show Charlie Whittingham was bilked out of up to $2 million in the last five years.

The money, according to Whittingham’s attorney, Richard Craigo, was taken from the 77-year-old trainer’s payroll accounts, most of it in the form of paychecks that were issued to non-existent employees.

The Sierra Madre Police Dept. and the major fraud division of the Los Angeles County district attorney’s office are investigating the apparent scam, which was discovered about a month ago.

Sally Stubblefield, a bookkeeper who worked for Whittingham for about eight years, left the trainer about two months ago. Whittingham, Craigo and John Cordischi, a police investigator, would not name Stubblefield as a suspect in the case, but her attorney, Fred La Deane, linked her to the investigation.

“She quit Whittingham about three months ago, but she wasn’t fired,” La Deane said.

“I don’t know what they’re talking about and neither does she. She says that they’re crazy as hoot owls about this. So far, they’ve evaded us in furnishing any specifics.”

Cordischi said it is likely that charges of forgery and grand theft will be filed. He said that more than one person could be involved, and there is a possibility that at least one suspect might have to be extradited from another state.

“The whole thing is still under investigation,” Cordischi said. “This is a long paper trail, and the amount of money involved is between $1 million and $2 million. Four banks and about eight to 10 accounts are involved.”

Craigo estimated that the total amount improperly paid might be more in the vicinity of $1 million.

Craigo and Cordischi said that payroll checks were issued in the names of fictitious Whittingham employees as well as the names of former employees. Endorsements were then apparently forged before the checks were cashed. Bogus social security numbers were also used.

“They were padding the payroll,” Whittingham said. “That’s not hard to do. I’ve got more than 100 employees. It’ll work out somehow.”

Whittingham, who lives in Sierra Madre and operates his stable out of Santa Anita, Hollywood Park, Del Mar and the San Luis Rey Downs training center in Bonsall, began his training career in 1931. Whittingham’s horses have earned more than $90 million, which ranks him second to Wayne Lukas on the all-time list.

At 73, Whittingham became the oldest trainer to win the Kentucky Derby when Ferdinand won the race in 1986, and Whittingham won the Derby again with Sunday Silence in 1989.

“Charlie has a small operation by many business standards, but in another way, it’s a complicated operation,” Craigo said. “He has one operation that’s run out of the track where he’s running his horses; he has another operation off-track (in Sierra Madre), and then there’s the operation at San Luis Rey Downs. Many companies wouldn’t put a business like this in the hands of just one trusted employee, but then this is Charlie. He’s always had a lot of faith in the people who have worked for him, and he’s been very loyal to these people through the years.”

Cordischi said there were instances of phantom employees receiving bonus checks. Craigo said that deductions for Social Security, federal and state taxes were made from the paychecks.

“We’re hoping to get some of this money back, because it shouldn’t have been paid in the first place,” Craigo said. “But it’s a big mess, and some of us have a lot of work in front of us. The federal government has a three-year statute of limitations on money it gets, so money that was paid longer ago than that may not be returned.”

According to one source, Stubblefield is in Texas, but La Deane said this is not correct. “She’s much closer than that, in case she’s needed,” he said.

Stubblefield reportedly owns a three-family building near Santa Anita that is valued at about $600,000 and also is said to own property in Texas.

“Something like this could always happen,” Craigo said. “In this case, it’s happened in spades.”