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A Stockton woman who pleaded guilty to embezzling $824,000 from a farming company north of Tracy turned herself in this morning to begin serving her 5-year prison sentence.

Nancy Mulkey, 58, will have to serve at least half that term before she qualifies for parole, said San Joaquin County Deputy District Attorney Stephen Taylor.

Mulkey was arrested in September after ABF Farm Services Inc. laid her off along with several other employees. Her sentencing was delayed from January to give the company more time to get some money back. She was officially sentenced and incarcerated this morning.

An outside auditor hired by the business in August found that the longtime employee had paid off her personal debts with company checks. Court papers say the theft spanned a period of more than four years. The company said in a court statement that Mulkey took some money out of the company’s payroll account, which inflated W-2 forms of other employees, who then had to pay higher income taxes.

The accountant hired by the farming company said the theft dated back to at least 1999 and probably exceeded $1 million.

A civil lawsuit settled this week requires Mulkey to pay back $636,000 after already having signed over her everything she owned — savings accounts, cars and her Stockton home — to the tune of $237,000. She’ll also have to pay back more than $20,000 in attorney fees and the $2,300 in court fees.

After her release from prison, Mulkey will have to pay back ABF for the rest of her life, her attorney Michael Platt said.

Reached at her Stockton home, Mulkey declined to comment.

ABF general manager Chip Salmon said in a statement filed earlier this week that Mulkey’s actions were more than just a mistake, and that she clearly knew what she was doing.

“I am particularly disgusted — outraged would be a better word — at the actions of Ms. Mulkey following her arrest,” Salmon stated. “She has engaged in a systematic campaign to destroy me and my family.”

The ABF office lies in the Delta islands about 10 miles north of Tracy on Union Island. The company grows 2,600 acres of walnuts, grapes, tomatoes, alfalfa and blueberries.

Salmon said it’ll take a long time for his business to recover from Mulkey’s theft and that the emotional toll was devastating.

“Whenever an employer is wronged by a trusted employee, it hurts,” he said. “It hurts by a breach of trust, and it hurts because of financial loss.”

But he said he’s pleased with the outcome, and satisfied for now that at least some of the money has been repaid.

“Our ability to recover is going to be a slow process,” he said. “But we’re thankful for how it turned out with the criminal case, with the civil case and the grand jury indictment. We’re just going to put our boots back on and continue doing what we do.”

• Contact Tracy Press reporter Jennifer Wadsworth at 830-4225 or jwadsworth@tracypress.com.