Date: January 3, 2020
Jonathan D. Larsen, Special Agent in Charge of the New York Office of the Internal Revenue Service, Criminal Investigation Division ("IRS-CI") and Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that Hicham Kabbaj, a former senior manager in Manhattan for a global internet company ("Company-1"), pled guilty before Untied States Magistrate Judge Stewart D. Aaron to one count of wire fraud. Kabbaj will be sentenced by United States District Judge Richard M. Berman, to whom the case is assigned.
IRS-CI Special Agent in Charge Jonathan D. Larsen said: "Today, Mr. Kabbaj pled guilty to a serious felony because he chose to misuse his position of trust as a corporate executive to steal company funds for his own personal gain. As a result of the dedicated work of IRS-CI special agents, along with our partners at the U.S. Attorney's Office, Mr. Kabbaj will face the consequences of his crime when he is sentenced by a federal judge."
Manhattan U.S. Attorney Geoffrey S. Berman said: "As he admitted today, Hicham Kabbaj defrauded the company for which he worked by arranging for payment of fraudulent invoices to a shell company he created. Kabbaj now awaits sentencing for his $6 million deception."
According to allegations in the Information and other documents filed in federal court, as well as statements made in public court proceedings:
From at least August 2015 until at least May 2019, Kabbaj engaged in a scheme to defraud his employer into paying a vendor named Interactive Systems, a Kabbaj-controlled shell company, for various information technology ("IT") products and services. As part of the scheme, Kabbaj caused Interactive Systems to send invoices to Company-1 claiming that Interactive Systems performed services and purchased firewalls and servers for Company-1. In reality, Interactive Systems did none of that work, and Kabbaj quickly transferred the money that Company-1 paid to Interactive Systems to his own personal bank accounts. In total, Kabbaj defrauded Company-1 of more than $6 million as a result of the scheme.
Kabbaj, 48, of Floral Park, New York, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison. Kabbaj has agreed to forfeit his homes in Palm Beach Gardens, Florida, and Hewitt, New Jersey, as property traceable to the offense, among other assets, and he has agreed to pay restitution in the amount of $6,051,453.
The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the Judge.
Mr. Berman praised the investigative work of the IRS-CI and Special Agents of the U.S. Attorney's Office.
This case is being handled by the Office's General Crimes Unit. Assistant United States Attorneys Ni Qian and Andrew A. Rohrbach are in charge of the prosecution.