Norfolk Woman Sentenced to 18 Months for Embezzling $123,000 From Employer

NORFOLK, Va. — Katherine Louise Henderson, 55, of Norfolk, was sentenced to 18 months in federal prison for embezzling more than $123,000 from her employer, the U.S. Department of Justice announced on June 4, 2026.

Henderson diverted the funds over an extended period to pay personal gambling debts. The U.S. Attorney’s Office for the Eastern District of Virginia prosecuted the case in federal district court in Norfolk. The court ordered Henderson to serve the full 18-month term followed by supervised release; she must also make full restitution of $123,000.

The embezzlement directly affected her former employer, who lost $123,000 that was never recovered before charges were filed. Federal sentencing guidelines applied in the case treated the amount stolen and the breach of trust as aggravating factors. No other employees or accounts were implicated.

The sentence changes Henderson’s status from defendant to incarcerated felon effective immediately upon designation to a Bureau of Prisons facility. Upon release she will enter a period of supervised release during which any new gambling-related financial activity can trigger revocation.

The restitution order creates an enforceable judgment that follows her post-release and can be collected through wage garnishment or asset seizure.

Downstream, the Eastern District of Virginia U.S. Attorney’s Office must now monitor compliance with the restitution schedule and coordinate with the probation office. The employer can register the judgment as a civil lien if it chooses to pursue additional collection.

The case also adds to the department’s ongoing enforcement actions against embezzlement tied to gambling addiction, which frequently target small-to-medium businesses lacking robust internal controls.

This marks the latest federal prosecution in the Eastern District of Virginia involving theft from an employer to finance gambling losses. The Department of Justice has pursued similar cases in recent years under statutes prohibiting embezzlement and wire fraud when funds cross state lines or involve financial institutions.