Mistake Unmasks Mystery Horsewoman’s Double Life : Crime: Her funds for buying equines seemed limitless. But a paper trail revealed years of embezzlement.

Long before the FBI became involved, people were asking questions.

In the crowded stands of Tattersalls auction house, on the golf course at the exclusive Campbell House Inn and Country Club, in the cavernous auditorium at the Kentucky State Fairgrounds, they wondered: Who was this mystery woman who seemed to have breezed in from nowhere to ride and spend with the best of them?

And where did she get all that money?

Coworkers assumed she had a trust fund or had inherited a fortune. One horse trainer thought she had won the lottery. Others thought the family was related to the supermarket moguls of the same name. “It’s just not something you ask people about,” said Maureen Jenner, a freelance photographer with Saddle & Bridle magazine, who considered the 46-year-old horsewoman such a good friend that her son called her “Aunt Laura.”

She didn’t make money winning prizes. Saddlebreds, the oldest and most romantic of American breeds, show for the glory, not the purses. The most Laura Shaw ever won was a couple of thousand dollars.

Yet she was spending hundreds of thousands on horses, shows and trainers. And more on promoting herself. Last Christmas, Shaw bought a glossy, seven-page layout in Saddle & Bridle that included pictures of herself riding her champions. The spread cost $6,000.

Months later, Jenner was still holding the bill.

“I thought I knew her so well,” Jenner said, “but I guess I knew nothing at all.”

*

Beneath a hot red sun in a dusky sky, chestnut champions trot around the track, heads haughty, tails high, hooves tossing up rust-colored earth. In the stands, the crowd sips cocktails and coos applause. Summer in Kentucky and the Saddlebreds are showing, and horse lovers from everywhere converge on Lexington’s Red Mile racetrack.

Peacocks of the show ring, the Saddlebreds are called. With their artificially elevated tails and high-stepping gait, they seem to quickstep around the ring to the rhythm of a ragtime band.

Their regal air and showiness match those of their riders. Wearing top hats and tails or clutching the reins of a hackney in flowing white lace, they seem from another world. In a sense they are. It’s a world of old money and old bourbon, of rolling pastures and white-fenced fields, a place where shrines are built to champion stallions and money is no object when it comes to buying a beautiful mare.

Laura Shaw’s world.

Shelby Stonewall. Denmark’s Devotion. Romantic Interlude.

They captured her heart. They won her fame. They won her adulation and attention and love. In the fabled show rings of Kentucky’s Bluegrass country, they transformed the mystery horsewoman into a shining star.

Nine hundred miles away, Laura Shaw led another life, one that wasn’t so glamorous. The “Burial Urn,” the New England Financial building in Boston is called, its only concession to grandeur the lavish marble lobby through which hundreds of workers trudge every day. Laura Shaw was one of them, a regular office nobody in a colorless corporate world. After 21 years there, she earned $30,000 a year processing insurance claims.

In her fourth-floor cubicle, the only hint of her passion was the photographs of Saddlebreds on the wall.

Two worlds, two lives. At the center an awkward woman with dirty-blond hair, a square jaw, and wide hazel eyes that blinked nervously from behind gold-rimmed glasses.

Later, coworkers would say they never really knew her. Her friends in the horse world would say the same thing. And her neighbors in Marshfield, a pretty shoreline town about 30 miles from Boston, rarely saw her.

“She didn’t seem to have any close friends,” said trainer Bill Wise, who stabled Shaw’s horses at his farm in Danville, Ky. “I guess the horses were her friends.”

She rarely talked about her childhood in Paducah, or why the family moved to St. Louis after her father died, or how she got involved with horses in the first place.

Even the FBI agent described her as one of the most private people he had ever investigated.

*

Shaw’s first foray into the criminal world was tentative, a fraudulent check for $2,493, cashed in February 1988, according to company records. By the end of the year, the company said, she had embezzled $39,715.83. The same year, according to the American Saddlebred Horse Assn., Shaw bought two Saddlebreds.

It proved so easy.

James Emory. Jeanne Davidson. James Worth. The names came out of her head, and so did their claims: $14,239. $16,630. $25,219. The checks were endorsed by her and deposited into an account she controlled at Fleet Bank.

For nearly a decade that is how Laura Shaw lived, processing real claims, making up others, indulging in a passion that became an obsession. By the mid-1990s, she was buying and selling dozens of horses and embezzling as much as $730,000 a year. Over 10 years, company officials said, she stole more than $4 million.

Shaw cashed some checks, forging the names of fictitious policyholders. Her mother cashed others. The money rolled in, affording them a lifestyle they could only have dreamed of back in Paducah. First-class tickets to horse shows around the country, a rented apartment in New Hampshire where some of Shaw’s horses were stabled, custom-made riding outfits from Lexington’s fashionable Carl Meyers, rooms at the Campbell House Inn, a horse for her son.

But the money bought more than a lavish lifestyle. It bought prestige. It bought control. It bought acceptance in a world of blue ribbons and garlands, where being ushered into horseshoe-shaped victory boxes and being declared a winner is every rider’s dream.

“You have to tell yourself that this is not the real world,” said Jenner. “It’s a world of beautiful horses and beautiful people--we all want that lifestyle. You have to step back and not get swept up. You can’t just reach out and grab it.”

But that is exactly what Laura Shaw did.

For 10 years, she juggled her two worlds, using the one she hated to feed the one she loved. It wasn’t until she made a simple mistake that both came crashing down.

When the crime was eventually exposed, it was Shaw’s late mother whom people remembered best: Nell Shaw, a flamboyant bon vivant, who loved the social scene at the horse shows as much as the competitions. She would sweep into bars in her long mink coat, cigarette in one hand, glass of wine in the other, and drink toasts to champions all night long.

Laura preferred the barns. Still, mother and daughter were inseparable, living together in a tiny rental cottage in Marshfield, flying around the country to shows. Often the women were accompanied by 24-year-old Mark, Laura’s strapping movie-star-handsome son, who rode occasionally but never with the passion of his mother.

Laura was the plain one of the family, whose insecurities were evident in both her worlds: At work, she once confided that she sometimes felt overwhelmed by the responsibility of paying out claims; on the show circuit, she was pegged as easy to manipulate, quick to be smitten by a horse or a trainer.

“Reckless about spending,” said Bridget Parker, whose farm in Lexington stabled some of Shaw’s horses. It was not unusual for Shaw to bid up to $20,000 at Tattersalls for horses that caught her eye, she said.

“I remember when she bought one old mare,” Parker recalled. “I told her, ‘Laura, that horse is a complete outlaw, everyone knows it but you.’ She said, ‘Oh no, we’ll try her. If she doesn’t work, we’ll just turn her out.’ No one with an ounce of sense does that.”

But she could also be generous with her wealth, giving horses to friends, letting a young girl ride one of her Saddlebreds in shows, presenting Shelby Stonewall as a gift to the trainer who made him famous.

A poor rider to begin with, Shaw stuck with it, showing up faithfully for lessons every Tuesday and Thursday, even in the middle of winter. When she rode New Trial to victory at the United Professional Horsemen’s Assn.’s amateur spring championship in 1996, everyone cheered. It was a remarkable feat for a woman who started riding when she was 30.

“She was just so determined,” said Lillian Gilpin, who taught Shaw to ride at her farm in Plympton, Mass. “She ate, slept, breathed horses. If she saw a horse walk down the street she could name the parents. No one knew Saddlebreds better than Laura Shaw.”

And no one was more single-minded about possessing them.

Shaw was no master criminal, but once she found a loophole she was ruthless about exploiting it. At New England Financial, claims on many older policies are handled manually. It wasn’t hard to fabricate the backup paperwork or to get the required coworker’s signature. And it wasn’t hard to escape detection.

Relatively speaking, the fraudulent checks were for small amounts, an average of $25,000--nothing that would raise suspicions in a company where millions of dollars are paid out every day.

“She followed the right procedures,” said company spokesman Peter Harrington. “There was nothing unusual about her business practices.”

Except that she was courting disaster, and she seemed to know it. After her mother died in May 1998, Shaw drastically reduced the amount she was stealing--$281,510 in 1998 compared to $479,515 in 1997. She started selling off horses. She seemed to be trying to get out of the game.

Then she made a fateful mistake.

Last December, she canceled a check for a fraudulent claim after realizing that she had made an error on the backup paperwork. When she tried to redeposit it, the check bounced. Checks from New England Financial, one of the oldest, most venerable insurance companies in the Northeast, never bounce. Suspicious, the bank manager called the company.

Questions were asked. The FBI was called. On Dec. 17, hours before the annual office party, company officials escorted Laura Shaw from the Burial Urn. She never returned to her cubicle again.

At first she only admitted stealing a smaller amount, saying it was to help out with medical expenses for her mother. When the paper trail revealed the depth of her crime, she broke down and confessed.

Investigators said Shaw seemed genuinely shocked by the amount she had stolen. She also seemed relieved that the lie was finally exposed.

Her double life was over.

*

“I guess it was like an addiction,” said trainer Bill Wise. “And now she’ll pay the price.”

Wise learned about Shaw’s deception the way others did, in a letter from New England Financial. It was accompanied by a court order warning him not to part with any of her horses.

Still, he feels a certain sympathy for the woman who loved horses so much she came nearly every weekend to ride at his farm. Down the long cedar-lined driveway she would ride, past the old stone farmhouse, past the white-fenced fields and Surefire’s elegant tombstone. She felt at home here at Valhalla, a 57-acre equestrian paradise named for a Viking heaven.

In the barn, a 9-year-old chestnut gelding shuffles in his stall. Gaze into his soulful brown eyes and fall in love.

He used to belong to Laura Shaw. He used to be part of her passion. Now Star Lit Night belongs to Wise, who was entrusted by the insurance company to sell him, along with other ill-gotten steeds.

Wise had guessed that Shaw was in trouble. Months earlier she had told him that she would have to sell off her horses. She had lost her job, she said, after making a stupid mistake.

Talk to your boss, he urged her. Surely something can be worked out.

It’s gone too far for that, she said.

Soon after, Shaw pleaded guilty to 20 federal counts of embezzlement.

Each count carries a maximum penalty of 10 years imprisonment and a fine of $250,000. Prosecutors said she is likely to spend about four years in prison. She might also be ordered to pay restitution. Shaw was sentenced to 3 1/2 years in federal prison on Wednesday.

The insurance company owns all her assets, including 17 horses, her car and her pension plan. It also secured e $4.3-million lien against any future earnings or assets.

“She made a mistake,” Wise said. “Everyone makes mistakes.”

Not everyone is so nonjudgmental.

At New England Financial, where coworkers were individually grilled by the FBI, where there were initial suspicions of a co-conspirator, where daily work is monitored more closely than ever, no one is shedding tears for Laura Shaw.

“People felt uncomfortable about trusting coworkers, or they were worried they might have signed off on some of the fraudulent claims,” said coworker Julie Stroumbos. “She caused a lot of damage.”

*

In a pretty little rock garden on a secluded farm in Marshfield, a suntanned woman is busy with her trowel.

“I did it,” Laura Shaw says, voice heavy with resignation and regret. “I’ll pay the price. The old life is finished now. The horses are all gone.”

What will she do when she gets out of prison?

She smiles nervously. “Tend my garden.”

Her resignation gives way to a flash of defiance. If she had stolen for a charity or church, one investigator told her, she probably wouldn’t be facing time.

“But I did it for horses,” she says. “I loved the horses.”

She knows she must forget her dream world, forget the Red Mile and Tattersalls and Valhalla.

Shelby Stonewall. Denmark’s Devotion. Romantic Interlude. She will never be part of their world again.

“They took everything,” she says bitterly, and pauses as though pondering the irony of what she has just said.

Then she picks up her trowel and turns back to her marigolds.