Former Hennessey CFO arrested for alleged embezzlement of $1.1 million
Former Hennessey’s Chief Financial Officer James Cram was arrested last week by Redondo Beach Police Department detectives for allegedly embezzling $1.1 million from the local restaurant chain.
Police arrived at Cram’s Rancho Palos Verdes home last Thursday morning with an arrest warrant for 19 felony counts, including grand theft, money laundering, and tax evasion. The charges had already been filed with the Los Angeles County District Attorney’s office. Cram was taken into custody and brought to the RBPD jail on a $500,000 bail without incident. He was still in custody at press time.
According to police reports, the arrest was the culmination of a year-long investigation. Cram worked for Hennessey’s from 2006 to 2010, and shortly after his departure an internal company audit found suspicious financial discrepancies related to Cram. Owner Paul Hennessey brought the matter to RBPD detectives.
Lt. Joe Hoffman, the head of the RBPD detective bureau, said that the investigators believe the amount Cram allegedly embezzled could be even higher than the $1,146,000 he is thus far charged with. Hoffman said that Cram’s alleged thefts were mostly in the form of company checks on which he signed Paul Hennessey’s name to pay for his own expenses, including personal bills.
Such forensic accounting cases are unusually labor intensive for small police departments. Hoffman said that the case was prioritized both because of the large amounts of money involved and due to Paul Hennessey’s stature in the community.
“He is a very successful local businessman and he was taken advantage of by an employee he trusted,” Hoffman said. “From my position as commander in the investigations division, I am very, very pleased our agency was able to help a very prominent local businessman in our community. The nature of these crimes was very serious.”
Hennessey started his first restaurant in Hermosa Beach in 1976 and now has more than a dozen Hennessey’s, H.T. Grill’s, and Mickey Finn’s, mostly in the South Bay (including three restaurants in Redondo Beach) but also in Orange County and Las Vegas. The company reports its annual revenues are more than $30 million.
Hennessey did not return phone calls seeking comment.
Councilman Steve Aspel, a friend of Hennessey’s, said that the personal nature of the alleged theft was upsetting to the restaurateur.
“Paul is one of the most generous people inRedondo Beach, as far as giving money to community events,” Aspel said. “Hopefully this doesn’t cut into that too much…And this guy will go to jail for a while, I hope.”
Hoffman said that several detectives assisted in the investigation, but he singled out lead investigator Det. Dave Arnold for praise.
“He did an outstanding job,” Hoffman said. “He really worked very hard and put in long hours on this case to put all the pieces together, sorting through it all and obtaining the search warrants for several financial institutions that we needed to file 19 counts. It would have been easy to stop at a lower number, but because he was so thorough we were able to get 19 felony charges – that shows how detailed Dave Arnold was. At this point, our investigation has been very successful.”