Business Crimes Hotline

CFO Convicted of Securities Fraud

The former Chief Financial Officer of a software firm was convicted of securities fraud, filing false reports with the SEC, and making false statements to auditors, according to the U.S. Attorney's Office for the Northern District of California. According to court documents, the charges were based on allegations that the company had improperly inflated its revenues by improperly accounting for certain transactions, including round- trip transactions, in order to meet quarterly goals. It was further alleged that the defendant made or caused to be made false and misleading statements to the public and to the company's auditors. (United States v. Goyal, 04-201, N. D. Cal.)

Connecticut

Bookkeeper Sentenced to 71 Months in Prison for Embezzlement

A bookkeeper for a small management company was sentenced to 71 months in federal prison for embezzling over $15 million from her former employer and other entities related to the management company, according to federal prosecutors. The bookkeeper admitted that, over a five-year period, she prepared checks for the company's owner's signature, and then used the checks to pay expenses for herself and her husband. In addition to the prison term, she was ordered to pay $15.5 million in restitution. (United States v. Muldoon, 07-00021, D. Conn.)

Illinois

Lawyer Indicted on Fraud And Bribery Charges

A prominent Chicago lawyer, and former alderman, was indicted on federal fraud and bribery charges for allegedly scheming with a Chicago businessman to obtain a kickback from the sale of a building owned by a Chicago medical school, according to the U.S. Attorney for the Northern District of Illinois. Under the alleged scheme, the lawyer was to find a buyer willing to pay the two men a $1.5 million kickback in exchange for arranging the sale, and for the businessman to use his influence as a trustee of the medical school to ensure the building was sold to the selected buyer. (United States v. Vrdolyak, 07-00298, N.D. Ill.)

Texas

Oilfield Contracting Company Agrees to Record $44 million in FCPA-Related Fines

A wholly owned subsidiary of an international oilfield contracting services company pled guilty to violating the Foreign Corrupt Practices Act ('FCPA') after admitting that it paid over $4.1 million in bribes to an intermediary that the company knew would transfer the funds to an official of a state-owned oil company in Kazakhstan, according the DOJ. The company agreed to pay a criminal fine of $11 million, $10 million in civil penalties and more than $24 million in disgorgement of profits earned in connection with the project. The company also agreed to serve a three-year term of organizational probation, and to adopt a comprehensive anti-bribery compliance program. The combination of fines and other penalties is the largest monetary sanction ever imposed in an FCPA case. (United States v. Baker Hughes Services International Inc., 07-00129, S.D. Tex.)

Manager of Peruvian Subsidiary Indicted for Defrauding U.S. Oil Company

A former manager of the Peruvian subsidiary of an American petroleum company was indicted by a federal grand jury on charges of wire fraud and false statements, according to federal prosecutors. The charges stem from the manager's alleged seven-year scheme to defraud his employer by creating fraudulent invoices for sham vendors, submitting them to corporate headquarters in the U.S. for payment. It is alleged that upon payment, and converting the checks issued to the sham vendors to his own use. (United States v. Garza, 07-00167, S.D. Tex.).

California

Company President Indicted For Defrauding Computer Equipment Manufacturer

The president of a Massachusetts technology company was indicted by a federal grand jury for defrauding a national computer equipment manufacturer of computer networking equipment and for money laundering, according to the Department of Justice. It is alleged that the defendant used fictitious names, e-mail accounts, and mailboxes to submit false claims to the manufacturer. The fictitious claims asserted that certain parts covered by the company's service contracts were defective. It is alleged that when the company provided replacement parts in response to the claims, the defendant sold the replacement parts through his company to other computer equipment resellers. (United States v. Daly, 07-00282, N.D. Cal.)

CFO Convicted of Securities Fraud

The former Chief Financial Officer of a software firm was convicted of securities fraud, filing false reports with the SEC, and making false statements to auditors, according to the U.S. Attorney's Office for the Northern District of California. According to court documents, the charges were based on allegations that the company had improperly inflated its revenues by improperly accounting for certain transactions, including round- trip transactions, in order to meet quarterly goals. It was further alleged that the defendant made or caused to be made false and misleading statements to the public and to the company's auditors. (United States v. Goyal, 04-201, N. D. Cal.)

Connecticut

Bookkeeper Sentenced to 71 Months in Prison for Embezzlement

A bookkeeper for a small management company was sentenced to 71 months in federal prison for embezzling over $15 million from her former employer and other entities related to the management company, according to federal prosecutors. The bookkeeper admitted that, over a five-year period, she prepared checks for the company's owner's signature, and then used the checks to pay expenses for herself and her husband. In addition to the prison term, she was ordered to pay $15.5 million in restitution. (United States v. Muldoon, 07-00021, D. Conn.)

Illinois

Lawyer Indicted on Fraud And Bribery Charges

A prominent Chicago lawyer, and former alderman, was indicted on federal fraud and bribery charges for allegedly scheming with a Chicago businessman to obtain a kickback from the sale of a building owned by a Chicago medical school, according to the U.S. Attorney for the Northern District of Illinois. Under the alleged scheme, the lawyer was to find a buyer willing to pay the two men a $1.5 million kickback in exchange for arranging the sale, and for the businessman to use his influence as a trustee of the medical school to ensure the building was sold to the selected buyer. (United States v. Vrdolyak, 07-00298, N.D. Ill.)

Texas

Oilfield Contracting Company Agrees to Record $44 million in FCPA-Related Fines

A wholly owned subsidiary of an international oilfield contracting services company pled guilty to violating the Foreign Corrupt Practices Act ('FCPA') after admitting that it paid over $4.1 million in bribes to an intermediary that the company knew would transfer the funds to an official of a state-owned oil company in Kazakhstan, according the DOJ. The company agreed to pay a criminal fine of $11 million, $10 million in civil penalties and more than $24 million in disgorgement of profits earned in connection with the project. The company also agreed to serve a three-year term of organizational probation, and to adopt a comprehensive anti-bribery compliance program. The combination of fines and other penalties is the largest monetary sanction ever imposed in an FCPA case. (United States v. Baker Hughes Services International Inc., 07-00129, S.D. Tex.)

Manager of Peruvian Subsidiary Indicted for Defrauding U.S. Oil Company

A former manager of the Peruvian subsidiary of an American petroleum company was indicted by a federal grand jury on charges of wire fraud and false statements, according to federal prosecutors. The charges stem from the manager's alleged seven-year scheme to defraud his employer by creating fraudulent invoices for sham vendors, submitting them to corporate headquarters in the U.S. for payment. It is alleged that upon payment, and converting the checks issued to the sham vendors to his own use. (United States v. Garza, 07-00167, S.D. Tex.).