MINNEAPOLIS — A Kenyon woman has been sentenced to 111 months in prison for embezzling more than $881,000 from the owner of several Denny’s restaurant franchises near the Twin Cities and a family-owned construction firm in Rochester. Three years of supervised release and $1,058,777.18 in restitution, announced U.S. Attorney Andrew M. Luger.
In 2014, Kimberly Sue Peterson-Janovec, 59, became director of operations for MI5, Inc., a franchisee of Denny’s that owns and operates eight Denny’s franchises in Minnesota and Wisconsin, according to court documents. In this role, Peterson-Janovec provided extensive management oversight of all eight restaurants, including payroll, cash deposits, vendor and contractor billing, marketing, and coordinating Denny’s Corporate reimbursement.
According to court documents, from April 2014 to July 2019, Peterson-Janovec used her position to embezzle funds from MI5 and Denny’s by generating and submitting false vendor payment requests and then transferring those payments to for her own use and benefit. Peterson-Janovec also manipulated the company’s payroll system to issue unauthorized compensation to himself using the names of employees who no longer worked for the company. As part of the scheme, Peterson-Janovec falsified records, created fake email accounts, and generated fake email traffic in which she impersonated employees of various purported vendors. In total, Peterson-Janovec received approximately $336,000 in bogus vendor payments and approximately $20,000 in fraudulent payroll submissions using someone else’s identity. In addition, at sentencing, the court held that Peterson-Janovec was responsible for stealing an additional $181,000 in cash deposits from MI5.
In July 2019, MI5 discovered Peterson-Janovec’s fraud and terminated her job, according to court documents. After being fired in early 2020, Peterson-Janovec lied about his work experience to get another bookkeeping job at a family-owned construction firm in Rochester (identified as Company 3). Peterson-Janowek began as a bookkeeper, earned the trust of Company 3, and was eventually promoted to general manager. Peterson-Janovec used her position to design and execute a similar fraudulent scheme against Company 3. She issues multiple payments to herself using access to Company 3’s QuickBooks, and she does so in a way that makes the payments appear to be for Company 3 suppliers. This allowed Peterson-Janovec to make another $350,000 in just 18 months.
In total, Peterson-Janovec stole more than $881,000 from her employers, which she used to fund her lifestyle and hobbies, including a substantial down payment on her personal home. Peterson-Janovec committed annual tax crimes in her fraudulent scheme, resulting in more than $160,000 in unpaid taxes.
Peterson-Janovec was sentenced today in U.S. District Court by Chief Judge John R. Tunheim. Sentencing, Judge Tunheim described Peterson-Janovec’s actions as “brazen” and “greedy” and stressed the need to protect the public from further criminal activity by the accused.
On February 22, 2022, Peterson-Janovec was found guilty by a federal jury of 24 counts of fraud, aggravated identity theft and tax crimes. Notably, Peterson-Janovec has been convicted of federal fraud since 1998, when she embezzled more than $950,000 from another former employer.
The case is the result of an investigation by the U.S. Postal Inspection Service, the Burnsville Police Department and the IRS Criminal Investigation Division.
Assistant U.S. Attorneys Jordan L. Sing and Kimberly A. Svendsen prosecuted the case.