How a trusted employee’s alleged misconduct exposed vulnerabilities in small business security and sparked new measures across New York.

When trust is broken in the workplace, the repercussions can extend far beyond the balance sheet. In a case that has rattled the local business community, Schenectady accountant Gina L. Luby now faces grand larceny charges after allegedly stealing more than $50,000 from her Duanesburg employer. This post explains the facts behind the case, examines the legal framework in New York, and reviews how employee theft is being tackled by businesses and lawmakers alike. Read on to learn about the case details, the impact of such crimes, and what you can do to protect your own business.

The Arrest of Gina L. Luby

Timeline and Details of the Case

On May 6, 2025, State Police in Princetown arrested 53-year-old Gina L. Luby, a long-time employee in the accounting department of a Duanesburg business. Records show that Luby had been on staff since January 2020 and was allegedly involved in unauthorized payroll overpayments from January 2022 until December 2023. These systematic errors, which authorities describe as deliberate overpayments, are believed to have resulted in more than $50,000 being misappropriated. The case came to light on February 11, 2025, when a complaint was filed by the business after discrepancies were noted during routine audits.

After her arrest at her Schenectady residence, Luby was processed at the Princetown State Police barracks before being transferred to the Schenectady County Correctional Facility to await arraignment. Although the business name remains undisclosed, law enforcement has confirmed that the theft involved illicit alterations in payroll management.

Official Statements and Community Reaction

Law enforcement officials have stressed the seriousness of the charges. “This case highlights the importance of robust internal controls in guarding business assets,” a police spokesperson noted. Local business owners have expressed concern, recognizing that such incidents not only undermine employee trust but also jeopardize the financial stability of small enterprises. The case has ignited dialogue about strengthening safeguards and enhancing oversight measures for employees, particularly those handling sensitive financial operations.

Understanding Grand Larceny in New York

Legal Definition and Penalties

Under New York Penal Law § 155.40, grand larceny in the second degree applies when property valued at more than $50,000 is stolen—or when the property is acquired through extortion. In cases like Luby’s, the charge is classified as a Class C felony, carrying penalties of 3.5 to 15 years in prison and fines that may reach up to $5,000 or twice the value of the stolen funds. Courts often mandate restitution to the victim as part of sentencing.

How Such Cases Are Prosecuted

Prosecutors are tasked with proving that the defendant intentionally and unlawfully took property, aiming to permanently deprive the rightful owner of their funds. The burden of proof is high; the process normally includes an arraignment, followed by pre-trial challenges from the defense, and then a trial if no plea agreement is reached. In many white-collar cases, cooperation with investigators and efforts to restitute the stolen amount can lead to negotiated plea deals or reduced sentences, although the severity of the offense stays front and center.

The Hidden Cost of Employee Theft

Prevalence and Impact on Small Businesses

Employee theft remains a pervasive issue across the United States. Nearly 58% of small business retailers have encountered some form of internal fraud. National estimates place the total annual cost of employee theft at around $50 billion, a figure that can represent as much as 5% of a small business’s revenue. For many small enterprises, a single act of internal theft can trigger operational disruption, leading to significant financial strain that may even precipitate bankruptcy in more vulnerable companies.

Why Accounting Roles Are Vulnerable

Accounting and financial positions inherently come with a high degree of trust and access to sensitive monetary systems. The Association of Certified Fraud Examiners reports that nearly 46% of embezzlement cases involve such roles—with median losses per incident reaching around $145,000. The sophistication of payroll systems, coupled with the routine nature of certain financial transactions, can occasionally create opportunities for misappropriation that go undetected for extended periods.

Real-World Consequences

The fallout from employee theft extends beyond immediate financial loss. The average theft incident not only drains critical capital but can also cost businesses upwards of $1 million when legal fees, audit expenses, and lost productivity are factored in. Additionally, such breaches erode customer trust and can persistently dampen employee morale. As Business.com’s Managing Editor Chad Brooks remarks, “Keeping workers happy is the simplest way to prevent theft.”

How New York Is Responding

Legislative and Law Enforcement Initiatives

New York State is taking a proactive stance on combating workplace fraud. Recent legislative measures have expanded worker protections, incorporating stricter penalties for wage and payroll theft. For instance, a legislative package now allows victims to request the seizure of an employer’s assets during legal proceedings, while also broadening the scope of what counts as wages to include non-discretionary bonuses. Governor Kathy Hochul’s administration has allocated significant funding—over $40 million in the FY25 budget—to support enhanced law enforcement efforts, including specialized task forces dedicated to investigating organized retail and employee theft.

Governor Hochul emphasized the need for stronger measures, stating, “Sophisticated organized retail theft operations are putting frontline workers at risk, and we’re taking new steps to end this chaos.”

Business and Community Engagement

In addition to top-down legislative reforms, local business organizations are rallying to protect their communities. The Retail Council of New York State and the Business Council of New York State have both issued statements supporting the new measures. Melissa O’Connor, President and CEO of the Retail Council, commented, “The retail industry strongly supports proposals that enhance security and reduce the risk of internal theft. Our communities must feel safe, and our businesses must be accountable.”

Local policymakers have also stressed the importance of employee well-being in reducing theft. As State Senate Majority Leader Andrea Stewart-Cousins stated, “New York’s workforce is the engine that drives our economy. They deserve not only fair wages but also workplace safety and strong legal protections.”

Protecting Your Business

Best Practices for Prevention and Detection

Business owners can adopt several strategies to combat internal theft:

• Implement Internal Controls: Segregating duties prevents any single employee from having unchecked access to financial transactions. Regular audits can also help identify discrepancies early on.

• Leverage Technology: Modern AI-powered monitoring systems can detect suspicious financial patterns in real time, significantly boosting detection rates.

• Encourage Whistleblowing: Establish secure, anonymous channels for reporting suspicious behavior. Many theft cases are uncovered through tips provided by employees.

• Conduct Thorough Background Checks: Rigorous vetting during the hiring process can reduce the risk of employing individuals with a history of fraud.

• Foster a Positive Workplace Culture: Employee recognition programs and fair compensation contribute to a positive environment, lowering the chances of internal theft.

Building a Culture of Trust and Accountability

The most effective defense against employee theft is a culture of transparency and mutual respect. Businesses that cultivate trust not only deter fraudulent behavior but also promote long-term success. As one law enforcement official noted, “Every organization must invest in robust internal controls and employee satisfaction measures. When workers feel valued, they are far less likely to engage in dishonest acts.”

Call to Action

Gina L. Luby’s arrest serves as a stark reminder of the vulnerabilities that even long-standing employees can exploit. For small businesses throughout New York, the implications are clear: establishing strong financial controls and fostering a culture of trust are paramount. While policymakers and law enforcement are stepping up their efforts, the first line of defense lies within every organization. Business owners are urged to reassess their internal practices, invest in modern security solutions, and prioritize employee well-being—all of which are essential steps in preventing financial crimes.

Stay informed and take proactive steps today to protect your enterprise. The safety of your business depends on the actions you take now.