San Diego

San Diego Woman Sentenced for $1 Million Jazzercise Embezzlement

Potts gambled more than $900,000 a year in slots, while stealing from the Jazzercise company

The former finance director of Jazzercise was sentenced Tuesday for embezzling more than $1 million from the Carlsbad-based company.

Sherri Potts, who spent nearly nine years as the corporate director of finance for the physical-fitness firm, was arrested in Carlsbad in October. She faced 50 theft-related charges, including forgery, fraudulent appropriation and grand theft by an employee.

She pleaded guilty in March to one count of grand theft, three counts of forgery and one count of failing to report the stolen money on her tax returns. She also admitted that she stole more than $500,000.

Superior Court Judge Michael Washington sentenced the 60-year-old Fallbrook resident to seven years and eight months in prison.

According to court documents, authorities suspect much of the stolen money was siphoned from petty cash funds. She stole an average of $10,000 a month over the course of a few years. 

After Potts was fired in 2014, the company uncovered the embezzlement.

Potts routinely arranged for an average of $12,000 a month to be delivered into the company’s petty cash fund, stated Winn. But the company’s real petty cash needs were only about $2,000 a month.

She deposited more than $900,000 in cash and non-payroll checks into her accounts between 2007 and 2013, according to Carlsbad police investigators.

The investigation revealed that 48 forged checks, totaling more than $150,000, had been written from the personal accounts of Jazzercize owners Jack and Judi Sheppard Missett. The money paid for Pott’s personal expenses, including credit card payments.

After she was fired, Potts contacted a former coworker to return $9,000 of petty cash in her possession. The huge cash bundle triggered the company to bring in forensic auditors.

According to court documents, police investigators learned that for many years Potts regularly gambled at Pala Casino, favoring slot machines in particular.

From 2008 to 2013, police said, she gambled more than $900,000 a year in slots. Some years, she gambled more than $1 million. Casino records also show that she lost an average of $200,000 a year for most of those years.

Deputy District Attorney Anna Winn said Potts will be eligible for release after serving two years.

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