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Larry Magstadt, owner of Northland Boring LLC in Streele, stands in the company equipment yard in March. He is hoping his business will survive after an employee made unauthorized payments to herself from his business account.

A woman convicted of embezzling from a North Dakota drilling contractor was ordered this week to pay more than $690,000 in restitution.

South Central Judicial District Judge James Hill ordered Melinda Strom to pay restitution to Northland Boring in the full amount that prosecutors and the victim requested.

Strom, 51, a former secretary for the business, admitted in March she made unauthorized payments and transfers to herself, but disputed the dollar amount.

Hill held a restitution hearing on April 9 and ruled on Wednesday that prosecutors and the owner of the company, Larry Magstadt, proved the total amount stolen exceeded $690,000.

“The court finds the conduct of Strom to be extensive, fraudulent, deliberate and deceitful,” Hill wrote. “The court finds it was also incredibly devastating to Northland Boring.”

From 2014 to 2017, Strom controlled the checks issued for Northland Boring, a horizontal drilling contractor that had an office in Bismarck but has since consolidated operations to Steele.

Strom made unauthorized payments or transfers to herself or her business, Beary Tweet and Tasty. She also controlled data entry, so some checks that appeared to be going to other businesses were actually going to Strom’s bank account, Hill wrote in his ruling.

The theft was discovered in 2017 after a tax preparer noticed some discrepancies in Northland Boring’s books.

Strom pleaded guilty in March to misapplication of entrusted property, a Class A felony. Hill sentenced her to supervised probation for three years after attorneys for both sides argued the sentence would give her the opportunity to pay the company back.

In his ruling, Hill cited Mary’s Law, which says victims have the right to full and timely restitution.

Senior Assistant Burleigh County State’s Attorney Julie Lawyer said prosecutors are pleased with the order. Strom’s probation officer will work with her on a payment plan, Lawyer said.

Strom testified she is not employed and has applied for disability benefits. Lawyer said, if those benefits are granted, that would leave Strom with limited income to pay restitution.

Shelly Magstadt and her husband had no comment this week on the restitution order.

After the hearing in March, Larry Magstadt said his business that once employed 13 people was struggling to survive after the theft and the slowdown in the oil industry.

Defense attorney Bobbi Weiler said she and her client had no comment on the restitution order.

(Reach Amy Dalrymple at 701-250-8267 or Amy.Dalrymple@bismarcktribune.com)

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