Former Rochester CEO going to prison for defrauding his own company


Date: September 30, 2022


U.S. Attorney Trini E. Ross announced today that Michael Margiotta, of Rochester, NY, who was convicted of wire fraud and filing a false tax return, was sentenced to serve 46 months in prison by U.S. District Judge Charles J. Siragusa. Margiotta was also ordered to pay restitution totaling $914,810.52 to the IRS.

Assistant U.S. Attorney Laura A. Higgins, who handled the case, stated that Margiotta was employed as the chief executive officer of eHealth Global Technologies. In May 2011, as eHealth CEO, Margiotta entered into a contract with Healthcare Network Alliance, LLC (HCNA) for employment recruiting services. HCNA was owned by Margiotta's wife. The agreement provided that HCNA would be compensated if candidates referred to eHealth were hired. Between June 2011, and January 2014, Margiotta caused HCNA to submit invoices for recruiting services to eHealth that he knew that HCNA had not provided. For instance, on April 19, 2013, HCNA submitted an invoice to eHealth requesting payment of $44,000 for recruiting an employee. HCNA had not recruited the employee, and Margiotta knew that HCNA was not entitled to be paid a recruiting fee for the employee. In total, Margiotta caused HCNA to prepare and submit fraudulent invoices for approximately 23 employees of eHealth that HCNA had not recruited totaling $380,960.

In addition, Margiotta filed a false tax return for the year 2013, claiming income of $260,334, in actuality, his taxable income was $611,195.00, resulting in a tax loss to the IRS of $137,067.

The sentencing is the culmination of an investigation by the Internal Revenue Service, Criminal Investigations Division, under the direction of Thomas Fattorusso, Special Agent-in-Charge, New York Field Office.