The following examples of Corporate Fraud investigations are excerpts from public record documents on file in the court records in the judicial district in which the cases were prosecuted.

Pennsylvania Man Sentenced For Multi-Million Dollar Fraud

On September 27, 2010, in Philadelphia, Pa., Michael G. Spada, of Norristown, Pa., was sentenced to 72 months in prison in connection with a fraud scheme in which he embezzled more than $6 million from his employer. On March 18, 2010, Spada pleaded guilty to wire fraud, bank fraud, filing a false tax return, and making a false statement to the federal government. According to court documents, Spada hid the embezzlement from both a bank, that extended him a $3.2 million line of credit, and from the Internal Revenue Service (IRS). He embezzled the funds by diverting company checks to his own account and taking more than $400,000 in unauthorized salary between 2000 and 2009. He then failed to report most of the embezzled money on his tax returns and lied to IRS agents about his embezzlement during a meeting on June 22, 2009. In addition to the prison term, the judge ordered Spada to pay restitution in the amount of $3,990,208 to his employer and the IRS.

Owner of New York and New Jersey-Based Medical Companies Sentenced for Tax Evasion

On August 19, 2010, in Newark, N.J., Jack Melman, aka Yaakov Melman, of East Brunswick, New Jersey, was sentenced to 12 months and a day in prison and ordered to pay a $3,000 fine and to pay back taxes, interest, and penalties to the Internal Revenue Service (IRS). Melman, the owner of New York and New Jersey-based medical companies, pleaded guilty on September 17, 2009, to one count of tax evasion. According to court documents and statements made in court, Melman was the part owner of Air Plus Surgical Supplies, incorporated in New York, and the sole owner of Ortho Med Distributors Inc. and EQU Management, Inc., both incorporated in New Jersey.  These companies primarily bought and sold medical supplies and equipment.  Melman diverted some of the income he received from customers of Air Plus, Ortho Med, and EQU Management by issuing checks from those corporate accounts to a co-conspirator’s company. In return, the co-conspirator issued personal checks back to Melman, which he then deposited into his personal savings and investment accounts. Melman also directed some of his companies’ customers to issue corporate checks payable to cash, which he then deposited into his personal accounts. At his guilty plea, Melman admitted that he failed to report approximately $205,947 in diverted income on his 2001 tax return.

Former New Jersey Company President Sentenced on Securities Fraud and Money Laundering Charges

On August 4, 2010, in Camden, N.J., John P. Sgarlat, former president of publicly-traded company eContent, Inc., was sentenced to 66 months in prison and ordered to pay $1.5 million in restitution to the victims of his offenses.  In addition, Sgarlat was ordered to forfeit $320,000 in U.S. currency, as well as a vehicle, certain artwork, and an autographed Tiger Woods caddie coverall from the 2001 Masters golf tournament.  According to court documents and statements made in court: from October 1999 to April 2001, Sgarlat was the president of eContent, Inc., and remained a company shareholder after his departure in April 2001. Sgarlat admitted that while he was the company president, he and other officers and directors of eContent misused company funds for personal expenses, which included using corporate American Express cards to pay for personal items.  Sgarlat fraudulently issued company stock to alleged “consultants” to the company.  However, these individuals never performed the services for eContent.  Sgarlat also used Form S-8 to issue free-trading company stock, with a market value of approximately $559,000, to firms and individuals who performed securities-related services for eContent.  Sgarlat admitted that in February 2002, he sold 435,125 shares of eContent stock to a stock promoter at a substantial discount. This stock was then used in connection with illegal promotional activities.  Additionally, Sgarlat laundered the proceeds of a separate fraud scheme.  Specifically, in February 2002, Sgarlat opened a bank account at a Wachovia Bank in Wellington, Florida, in the name of “Convergiton, Inc.,” which he used to pay his personal living expenses.  Between February 2003 and September 2005, Sgarlat solicited certain people to invest in two companies, and told these people to send money to him for investment. Sgarlat then deposited the money into the Convergiton account and use the money for his personal expenses.

Former GlobeTel CEO Sentenced for Securities and Tax Fraud Conspiracy

On July 26, 2010, in West Palm Beach, Fla., Timothy Huff was sentenced to 50 months in prison and three years of supervised release.  Huff pleaded guilty to a one-count Information charging him with a dual object conspiracy to commit securities fraud and to defraud the United States, the Treasury Department and the Internal Revenue Service (IRS).  According to the Information, Huff was the CEO of GlobeTel Communications, Corp. (GlobeTel), which purported to be in the wholesale telecommunications business.  Huff and his co-conspirators caused GlobeTel to report fictitious revenue on its books and in periodic filings with the Securities Exchange Commission (SEC).  Huff and Thomas Y. Jimenez created fraudulent invoices and fraudulent technical documents, known as “call detail records” (CDRs), that appeared to corroborate the fictitious revenue GlobeTel was reporting.  Huff and Jimenez provided the fraudulent CDRs and invoices to GlobeTel’s independent auditors to mislead them into believing that GlobeTel had received more than $22,600,000 in fraudulent revenue.  Huff and Jimenez made six wire transfers between May 2004 and February 2005, totaling approximately $980,500. These funds were purported to be the proceeds of a stock-loan transaction between Huff and other GlobeTel executives. However, the transfers were the proceeds of a fraudulent stock sale.  Additionally, Huff and others caused stock to be issued as compensation to themselves and other GlobeTel officers and directors.  Rather than reporting the stock as compensation, Huff and others disguised the transaction as a loan, by transferring the stock to C&M Management Consulting, Inc. (C&M), knowing that C&M would not hold the stock as collateral but would sell the stock.  Huff and Jimenez failed to have Forms 1099 issued for the stock transaction and failed to report the proceeds of the stock transaction on their personal tax returns for 2001 through 2004.

Corporate CEO, Vice President and Accountant Sentenced for Defrauding Maryland Company of Over $1.4 Million

On July 23, 2010, in Greenbelt, Md., Richard Vernon Priddy, of Glenn Dale, and Charles Loren Sample, of Annapolis, were sentenced to 30 months and 27 months in prison, respectively.  In addition, they were each ordered to serve three years of supervised release and pay $595,000 in restitution.  On July 22, in Bethesda, Md., Joseph Michael Broullire was sentenced to 12 months and a day in prison, two years of supervised release, perform 50 hours of community service, and ordered to pay a $15,000 fine.  According to court documents, from 2002 to 2007, Priddy and Sample served as Chief Executive Officer/President and Executive Vice President, respectively, for TVI Corporation. By the fall of 2002, Priddy and Sample learned that certain parts TVI was purchasing were available at a significantly lower price from another manufacturer in Seattle, Washington. They decided to form a company which would purchase the parts from the Seattle company and resell them to TVI. They had their accountant, Broullire, a certified public accountant, form the new company and act as its representative.  Broullire formed Containment & Transfer Systems, LLC (CATS) which purchased the parts from the Seattle company and re-sold them to TVI at approximately double the price.  Between 2003 and 2005, Priddy, Sample and Broullire caused TVI to pay CATS more than $2.5 million for the parts, approximately $1.4 million more than the price CATS paid.  Broullire formed trusts and opened bank accounts in the names of the trusts, into which $400,000 was transferred for the benefit of Priddy and Sample. Broullire was supposed to receive about 15% of the proceeds.  In October 2005, another company was formed, called Torrence Emergency Response Products, LLC (TERPS), to do business with TVI.  Priddy and Broullire formed a foreign corporation to purchase decontamination heaters from a manufacturer based in Italy and re-sell them to a manufacturer based in England.  Broullire and Priddy traveled to the Island of Jersey, where they established the foreign corporation. To store the proceeds of the European business, Priddy established a second foreign company called Global Contract Manufacturing Ltd., and opened a foreign bank account in that company’s name. In 2005, Priddy and Sample received approximately $177,000 in income that was transferred from the foreign account to the United States.  On their individual income tax returns for 2004 and 2005, Priddy and Sample failed to report this income, in addition to the CATS and TERPS income, and failed to report their interest in the foreign bank account.

California Man Sentenced in Investment Fraud Scheme

On June 28, 2010, in San Diego, Calif., Richard M. Hersch was sentenced to 110 months in federal prison, three years of supervised release, and ordered to pay at least $9.2 million in restitution to investors he defrauded in an investment scheme. Hersch pleaded guilty on November 16, 2009, to mail fraud and conspiracy to structure financial transactions. As part of his guilty plea, Hersch admitted that he operated an investment scheme in which he recruited investors by promising returns of two-to-six percent per week on investments into his company, All States ATM, Inc.  Hersch told investors that All States ATM had contracts with major horse racing tracks in California and around the country to operate Automated Teller Machines (ATMs) on the “back side” of the racetrack, an area used by employees of the racetrack, horse owners, horse trainers and others, and not accessible to the general public.  Hersch also claimed that the contracts his company had with the racetracks allowed him to operate a check-cashing or loan service on the back side of the track for the exclusive use of those with access to that area. Hersch claimed that he had 160 employees and hundreds of ATMs and that his company was in its eighth year of business. The horse racing tracks identified by Hersch reported having no contracts with him or All States ATM.  Based on these false representations, Hersch, and others, recruited more than 150 investors to invest approximately $25 million in All States ATM. In addition, Hersch admitted during his guilty plea that he conspired with others to structure 15 transactions, totaling $141,500, for the purpose of evading the currency reporting requirements. Hersch and others withdrew cash from a Wells Fargo Bank account in amounts between $9,000 and $9,500 because they knew that withdrawals of cash over $10,000 triggered the currency reporting requirements.

Chicago Man Sentenced for Embezzlement and Tax Evasion

On June 25, 2010, in Chicago, Ill., Louis I. Quilici was sentenced to 33 months in prison and two years supervised release on multiple charges including failing to pay the IRS the full income tax due in the approximate amount of $698,614.  Quilici, of Clarendon Hills, Illinois, was an officer and employee of Employee Management Corporation (EMCO) from 1998 to 2003 and owned approximately twenty percent of EMCO.  According to court documents, Quilici misappropriated and converted approximately $2,585,324 in receipts and other assets of EMCO to his own personal benefit.  More specifically, he used his position at EMCO to obtain checks made payable to EMCO and, without the knowledge of the officers at EMCO, deposited them in a bank account over which he was the sole signor. According to court documents, Quilici willfully attempted to evade income tax for the 2004 calendar year by depositing the funds embezzled from EMCO and using such funds for entirely personal transactions.  He also caused EMCO to issue payroll checks during 2004 in the names of individuals who were not employees of EMCO, deposited those checks into accounts he controlled and used the funds for personal transactions. 

Fort Lauderdale Attorney Sentenced to 50 Years for Billion Dollar Ponzi Scheme

On June 9, 2010, in Fort Lauderdale, Fla., Scott Rothstein, an attorney, was sentenced to 600 months in prison, to be followed by three years of supervised release. Rothstein had previously been issued an order to forfeit his interests in real property, vehicles, bank accounts, and investments.  According to court documents, from around 2005 through November 2009, Rothstein engaged in a pattern of racketeering activity through the defunct Ft. Lauderdale law firm of Rothstein Rosenfeldt and Adler, P.A (RAA).  During his plea, Rothstein admitted that RRA was the criminal enterprise through which he and others fraudulently obtained approximately $1.2 billion from investors through bogus investment and other schemes. Rothstein used RRA to fraudulently induce investors to: (1) loan money to non-existent borrowers based upon promissory notes and requests for short-term bridge loans for business financing; and (2) invest funds based upon anticipated pay-outs from purported confidential civil settlement agreements.  Rothstein falsely represented to the investors that the purported clients were willing to pay high rates of return on these loans.  Rothstein and other co-conspirators solicited clients to invest in purported civil case settlement funds.  Investors were falsely told that these settlements ranged in amounts from hundreds of thousands to millions of dollars.  Rothstein falsely represented to investors that these settlements could be purchased at a discount and would be repaid over time to the investors at full face value.  In addition, investors were told that these funds would be held in the trust account of RRA. The purported investment vehicles never existed, but were part of an elaborate Ponzi scheme in which new investors’ money was used to repay money owed to earlier investors. To conceal the fraud, Rothstein and his co-conspirators created false bank documents, false on-line bank account information, and false settlement agreements and promissory notes.  Also, Rothstein and others defrauded clients of RRA in a civil suit initiated by RRA on their behalf as plaintiffs.  Without the clients’ knowledge, RRA settled the lawsuit in favor of the defendant, thereby obligating the clients to pay $500,000 to the defendant in the civil lawsuit.  To carry out the fraud, Rothstein and co-conspirators created a false federal court order, purportedly signed by a U.S. District Judge, stating that the clients had won the lawsuit and were owed a judgment of approximately $23 million.  The false court order also stated that the defendant in the civil suit had transferred the funds to the Cayman Islands to avoid paying the judgment.  Rothstein and others falsely advised the clients that to recover those funds, the clients were required to post bonds.  In this way, Rothstein caused the clients to wire transfer approximately $57 million to a trust account he controlled, purportedly to satisfy the bonds. Rothstein and other co-conspirators used the funds obtained through the Ponzi scheme for their own benefit.

Man Sentenced To Nine Years in Prison for Fraudulent Investment Scheme

On May 25, 2010, in San Diego, Calif., Mark Todd Hauze was sentenced to serve 108 months in federal prison and three years of supervised release. A federal jury found Hauze guilty on January 26, 2010, of mail and wire fraud and false statement on tax return. According to the evidence presented at trial, from 2002 to 2005, Hauze used sales agents, a website, and other means to fraudulently solicit more than $10 million from members of the public, supposedly for participation in foreign currency trades. The evidence showed that Hauze convinced people to invest their retirement accounts and other funds in Universal Money Traders (UMT) by falsely representing, among other things, that UMT’s foreign currency trading had generated annual returns of 30 percent or more, that UMT used a guaranteed “stop-loss” system that limited a client’s potential losses, and that clients would be able to check their account balances and trading results on readily-accessible, accurate, online account statements. The evidence established that Hauze intentionally concealed from UMT’s clients that UMT did not actually use a guaranteed stop-loss, and that UMT regularly reported bogus trading results and false account balances to the clients. The false trading reports lead UMT clients to believe that their account balances were growing, when, in fact, Hauze had lost substantial amounts of the clients’ funds through trading, commission charges, and other means. The evidence also showed that Hauze used a substantial portion of the clients’ funds for his own personal gain, including for luxury vehicles and sports gambling, and that he used new money received from UMT clients to fulfill withdrawal requests made by other clients. Around March 2005, UMT failed to honor withdrawal requests made by their clients, which Hauze falsely claimed to be due to the client accounts being temporarily frozen for an audit. Hauze also attempted to hide nearly $900,000 of income from the Internal Revenue Service.

President of California Agribusiness Sentenced to 18 Months for Tax Fraud

On May 13, 2010, in San Jose, Calif., Curtis Leigh Parry was sentenced to 18 months in prison, to be followed by three years of supervised release, and ordered to pay $221,641 in restitution.  Parry, currently of Lodi, California, pleaded guilty on February 3, 2010, to three counts of tax evasion and three counts of filing false corporate income tax returns.  In pleading guilty, Parry admitted that from 1977 to 2003 he was the sole shareholder and owner of Salinas Valley Engineering & Manufacturing, Inc., (SVEM), a corporation in the business of manufacturing, selling and repairing agricultural equipment. In his plea agreement, Parry admitted that from 1999 to 2002 he knowingly diverted money from SVEM to himself through various fraudulent schemes. Parry had SVEM customers pay him directly for work or materials SVEM provided. He then deposited those checks directly into his personal bank account. He also deposited third party checks payable to SVEM into his personal bank accounts.  Parry also admitted in his plea agreement that he wrote numerous SVEM corporate checks payable to himself and deposited those checks into his personal bank accounts. He diverted SVEM funds to pay his personal expenses on various credit cards and used the SVEM corporate American Express card to make personal purchases for himself and family members. Parry failed to report any of the above-mentioned diverted funds as income on his personal income tax returns. The diversion of SVEM funds resulted in Parry filing false corporate income tax returns for SVEM for 2000, 2001 and 2002. Parry agreed that the total tax loss of SVEM’s corporate income tax returns was $93,435. Between 1999 and 2002, he wired more than $300,000 in diverted SVEM corporate funds overseas in an attempt to make his tax fraud difficult to detect. Parry conducted many of these transfers in structured transactions in amounts less than $10,000 to avoid currency transaction report requirements.

Former Maximum Dynamics Principal Sentenced to 60 Months in Prison for Conspiracy to Defraud the IRS and SEC

On March 19, 2010, in Denver, Colo., Eric Richfield Majors, of Colorado Springs, was sentenced to 60 months in prison for conspiracy to defraud the Internal Revenue Service (IRS) and the U.S. Securities and Exchange Commission (SEC).  Majors was also sentenced to three years of supervised release and ordered to pay $127,239 in restitution to company shareholders-investors.  He was also ordered to pay $39,301 in restitution to the IRS.  According to Major’s plea agreement, Maximum Dynamics, a company formerly based in Colorado Springs, became a publicly-traded company subject to SEC reporting in August 2002.  Between August 2000 and April 2005, Majors and co-defendant Joshua Wolcott conspired to cause materially false information to be included in Maximum Dynamics’ quarterly and annual statements and other reports and documents filed with the SEC.  Majors and Wolcott used the names and identities of unwitting Mexican nationals and shell companies to issue stock as compensation for consulting services purportedly done for the company.  Majors and Wolcott maintained control of this stock, sold the stock and used the proceeds for their own enrichment and purposes. Majors and Wolcott sold Maximum Dynamics stock issued to Mexican nominees on the open market, through brokerage accounts opened in the names of the nominees, to individual investors or entities through private sales arranged by, at the direction or on behalf of Majors and/or Wolcott.  They would then use the proceeds of the stock sales for their own personal use and personal expenses, to make payments to relatives and pay for their personal expenses, to pay Maximum employees and bona fide Maximum consultants for their work for Maximum or for other expenses incurred in connection with developing the business of Maximum. As a result of the net proceeds realized by the defendants from the sale of Maximum and non-Maximum stock that was sold in the names of the Mexican nominees, the government calculates the unpaid tax of $402,004, based on the realized gains of $1,262,258.

President and Vice President of Corporate Funding Financial of America Sentenced to Prison

On March 15, 2010, in San Diego, Calif., Richard Habib and Luis Madrid were sentenced for their roles in connection with a scheme to defraud investors through their real estate finance and development company, Corporate Funding Financial of America, Inc. (CFFA).  Habib was sentenced to 46 months in prison and three years of supervised release. Madrid was sentenced to 96 months in prison and three years of supervised release. Habib and Madrid pleaded guilty to conspiring to commit mail and wire fraud and one count of filing a false tax return. According to the plea agreement and other court records, beginning in July 2001, Habib and Madrid represented CFFA to the public and potential investors as a successful real estate investment company that had the capacity to develop profitable commercial and residential projects, including the “Finestra Lofts” development in the Little Italy section of downtown San Diego. Habib and Madrid offered investors secured and unsecured promissory notes with yearly returns ranging from 14 to 96 percent.  Habib admitted that: (a) he and Madrid misled investors about the success of CFFA as a real estate development company; (b) a large percentage of investors’ funds were not invested in CFFA’s real estate projects as represented to investors; (c) CFFA was paying the high rates of returns to investors with new money and not profits from the projects; (d) subordination agreements relating to Deeds of Trust that had been executed in favor of investors were forged; and (e) investor money was diverted for personal use. Habib admitted to defrauding investors of up to $20 million; Madrid admitted to defrauding investors of up to $50 million. Both Habib and Madrid admitted that they made false statements on their tax returns by not reporting all of the money they received from CFFA on their personal tax returns. Habib failed to report income he received from CFFA on his 2003, 2004, and 2005 tax returns and admitted that the tax loss to the United States from his false statements was $293,108. Madrid failed to report income he received from CFFA on his 2005 tax return, and admitted that the tax loss to the United States from his false statements was $89,963.

Former San Francisco Investment Fund Manager Sentenced

On January 15, 2010, in San Francisco, Calif., Edward S. Ehee, of Walnut Creek, Calif., was sentenced to 51 months in prison, to be followed by three years of supervised release, and ordered to pay restitution for committing wire fraud, tax evasion and making and subscribing a false partnership return. In his guilty plea on March 13, 2009, Ehee admitted that between 2001 and 2006 he defrauded investors in investment funds of more than $4 million. Ehee represented to investors that he would invest their funds in the securities markets and employ complex trading strategies to earn high returns with less risk than is ordinarily associated with such returns. Instead of investing the funds as promised, he diverted most of the funds for improper purposes, including the payment of existing investor distribution obligations using new contributions from other investors, and payments for the benefit of himself and his family. Ehee also admitted that although he had approximately $240,500 in taxable income in 2005, he did not file a tax return or pay any income tax for 2005. Ehee also admitted that he made and subscribed, under the penalties of perjury, a false partnership return for the tax year 2005 for one of his investment funds. Ehee intentionally inflated the assets reported on the balance sheet of the return to match the amount of money that he was supposed to have invested on behalf of his clients, when he knew that he had not invested any of their money in that fund in 2005.

North Dakota Executive Sentenced to Prison for Tax Fraud

On December 14, 2009, in Bismark, N.D., Michael Fisher, a former co-owner of Fisher Sand & Gravel Co. Inc. (FSG) based in Dickinson, N.D., was sentenced to 37 months in prison, ordered to pay a $90,000 fine and to pay restitution of $308,069.  On May 29, 2009, Fisher pleaded guilty to conspiracy to defraud the United States by impeding the IRS, aiding in the filing of false federal tax returns for FSG, and filing false individual tax returns.  According to court documents and testimony, Fisher caused FSG employees to pay for personal expenses such as construction expenses and furnishings for his personal residence and a recreation building, construction expenses for improvements to a gas station owned and controlled by Fisher, as well as household and utility bills, vacations, credit card bills and legal expenses for him and other Fisher family members.  These payments for Fisher were never reported to the IRS, they were deducted on the FSG corporate income tax returns, and Fisher failed to report all of his income on his individual income tax returns.

Two other FSG corporate officers were sentenced in October 2009 for their part in the conspiracy. Amiel Schaff, FSG’s former chief financial officer, and Clyde Frank, FSG’s former comptroller, were both sentenced to 12 months probation with a condition of home confinement, fined $1,000, and ordered to complete 20 hours of community service by speaking to college students about the criminal offense to which they pleaded guilty and corporate fraud in general.  In May 2009, the United States reached a deferred prosecution agreement with FSG in which FSG admitted responsibility for defrauding the United States. The agreement requires FSG to pay a total of $1.16 million in restitution, penalties and fines, implement measures to prevent future fraud at the company and cooperate with the IRS in audits of its tax returns. Under that agreement, prosecution against FSG is deferred until December 2011.

Former Chief Financial Officer Sentenced to 8 Years in Multi-Million Dollar Embezzlement

On November 30, 2009, in Orlando, Fla., Gary Ernest Williams was sentenced to 96 months in prison and ordered to pay more than $14 million in restitution to the United States and his former employer, Marian Gardens Tree Farm. In addition, Williams was ordered to forfeit homes in Pennsylvania and North Carolina; a 2007 Lexus automobile; and cash payments that had been used to purchase property in the Bahamas. Williams pleaded guilty on July 27, 2009, to four counts of mail fraud and one count of income tax evasion.  According to court documents, Williams had worked for Marian Gardens Tree Farm in Groveland, Florida, for approximately 20 years. In recent years, he had served as the company’s Chief Financial Officer. He had used this position of trust to embezzle $10.5 million worth of funds from the company by falsifying checks, taking out a business credit card in the company’s name, and making large cash withdrawals that he told bank officials were to be used to pay “employee bonuses.” Instead, Williams had deposited the stolen funds into his personal accounts and then had used them to fund a lavish lifestyle. In addition to stealing this money from his employer, Williams further had failed to pay federal income taxes in the amount of $3,675,000 on the illegally obtained funds.

President of Trucking Company Sentenced for Making False Statements on Tax Returns

On November 6, 2009, in Houston, Texas, Gladys Nell Bishop, president of Quality Trucking Inc., was sentenced to 36 months in prison, one year of supervised release and ordered to pay $584,688 in restitution to the Internal Revenue Service (IRS) for making false statements on her corporate tax returns for the years 2000, 2001 and 2002.  According to court documents, Bishop set up an accounting system at the company and maintained checking accounts at two different banks but only reported checks deposited into one of the checking accounts to the IRS.  The total unreported income for all three years was in excess of $500,000.

Former CEO of Charter School in Pennsylvania Sentenced on Fraud, Theft and Tax Charges

On October 22, 2009, in Philadelphia, Pa., Kevin O’Shea was sentenced to 37 months in prison for filing a false tax return, mail fraud, and theft from a federally funded program. In addition, O'Shea was ordered to pay $900,000 in restitution, a $1,000 fine and to forfeit $500,000.  According to court document, O’Shea worked for the Philadelphia Academy Charter School (PACS).  In July 2009, O’Shea pleaded guilty and admitted that he stole between $400,000 and $1 million from PACS by: (1) using approximately $710,000 in PACS’ funds to purchase a building in the name of his purported non-profit business; (2) demanding kickbacks from PACS vendors; (3) submitting for reimbursement at least $40,000 in fraudulent invoices for personal expenses; (4) billing approximately $50,000 worth of home repairs to PACS; (5) collecting approximately $34,000 in rent from entities using PACS facilities; and (6) hiring a computer firm in an attempt to destroy computer evidence to obstruct this investigation.  O’Shea also admitted to filing a false tax return for 2006.

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