Danielle Steel, the PA and the missing $2.7m no one noticed

Author files civil lawsuit after bookkeeper of 15 years pleads guilty to fraud

(GETTY IMAGES)

Danielle Steel, the doyenne of gloopy romantic fiction, has been manufacturing bestsellers at the rate of two a year for three decades.

She says she spends up to 20 hours a day hunched over her 1946 Olympia manual typewriter when seized by an idea, while the sales of her back catalogue keep racking up and the money keeps rolling in – to the tune of $30m (£19m) last year. So she might be forgiven for being unable to keep track of her loose change – even if that loose change amounts to millions of dollars.

But Steel has spotted that she has been diddled – and she has come out fighting against an assistant who, she says, has taken $2.7m from her over years of employment.

In a lawsuit filed in San Francisco, where she lives, Steel alleges that Kristy Watts, her bookkeeper for 15 years, wrote herself cheques taken from the author's fortune and lavished the author's credit card rewards on her own family.

Watts has already admitted embezzling $400,000 and it has emerged that she pleaded guilty to fraud and tax evasion in a hush-hush hearing last week. At the time, Steel was referred to only as "employer A".

In the civil lawsuit the author filed the same day, she used her most recent married name, Danielle Perkins. That lawsuit alleges that fraud and "continuous and repeated thefts" by Watts cost Steel $2.7m over the time that Watts was a controller of TPA, Steel's business.

In a written plea agreement, under which Watts faces two years and nine months in jail, the bookkeeper admitted that her crimes stretched back to 2003. Steel's lawsuit says that she "first learned of possible irregularities in Watts' handling of bank and credit cards and money belonging to plaintiff" in November 2008 and Watts was fired the next month.

Last year's investigation revealed that Watts, 47, had been using Steel's credit card reward points to purchase gift cards and airline tickets and had abused her control over the payroll to pay herself more than what she was due. To cover her tracks, Watts allegedly made false accounting entries, including for cheques for "household expenses".

Watts's lawyer told the San Francisco Chronicle that Watts regretted what she did and took full responsibility.

Steel is the quintessential airport fiction writer, author of 76 tales of relationships under stress among the rich and famous.

She has had at least one book in The New York Times bestseller list every week for the past seven years and her own life has been almost as tumultuous as the ones featured in her books. After a childhood that was split between France and New York, and torn between two divorced parents, she was married for the first time at the age of 18, to a banker, Claude-Eric Lazard. Four more marriages were to ensue; the most recent to the multimillionaire venture capitalist Tom Perkins lasted less than two years and ended in 1999. (Perkins later dedicated his own book, Sex and the Single Zillionaire, to his ex-wife.) Steel now splits her time between a San Francisco mansion and a beach house that is near St Tropez in France.

More than half a billion copies of Steel's books are in circulation across the world and are sold in 28 languages. About two dozen of them have been adapted for television.