Luxury, Lies, And A $10 Million Embezzlement – Above the Law

In
a
scandal
that
rocked
the
business
community,
a
former
high-profile
executive
was
sentenced
to
prison,
plus
five
years
of
supervised
release
and
restitution.
The
crime?
Embezzling
an
astonishing
$10
million
within
a
matter
of
months.
The
case,
however,
was
not
a
simple
paper
trail:
it
required
an
intensive
investigation
by
the
Forensic
Services
Practice
at

Charles
River
Associates
that
was
marked
by
meticulous
accounting
analysis,
advanced
digital
sleuthing,
painstaking
document
reconstruction,
and
robust
private
investigator
services.

It
all
began
when
a
public
company
hired
a
new
Chief
Marketing
Officer
(“Mr.
CMO”).
Within
days
of
arrival,
Mr.
CMO
launched
plans
to
take
the
company’s
marketing
strategy
in
new
directions.
He
purportedly
placed
company
funds
on
deposits
for
different
endorsements,
advertisements,
and
a
billboard
in
Times
Square.
He
then
manipulated
those
contracts
with
vendors
(including
some
that
had
undisclosed
related-party
ties
to
himself)
to
redirect
funds
back
to
his
personal
custody
and
control.

These
funds
were
used
on
spending
sprees
including
multiple
lavish
homes,
numerous
romantic
partners,
a
private
plane,
plastic
surgery,
luxury
watches,
jet
skis,
and
a
Mercedes
SUV.

A
year
later,
the
company
went
through
a
reduction
in
force,
and
Mr.
CMO
found
himself
out
of
a
job–perhaps
not
surprising
since
his
various
marketing
“investments”
had
never
actually
generated
much
of
a
return
on
investment.
Only
then
did
the
company
discover
alarming
signs
of
his
nefarious
activities.
CRA’s
forensic
experts
were
brought
in
by
the
company’s
board
to
investigate
what
had
happened,
assist
with
civil
recoveries,
and
give
comfort
to
management
and
the
external
auditors
that
they
were
on
the
right
path
forward
to
fixing
the
financial
statements.

Mr.
CMO
had
exploited
his
position
with
a
precision
that
was
both
daring
and
calculated.
He
had
created
fake
accounts,
fabricated
invoices,
and
manipulated
payment
records
to
reroute
company
funds.
Each
fraudulent
transaction
was
concealed
under
layers
of
legitimate
payments,
a
smoke
screen
that
would
take
weeks
to
clear.
This
was
no
opportunistic
theft
but
had
all
the
markings
of
a
deliberate,
calculated,
premeditated
scheme.

To
add
to
the
intrigue,
CRA’s
experts
employed
genealogical
research,
discovering
information
stemming
from
a
30-year-old
murder
case
that
linked
Mr.
CMO
to
a
sibling
who
was
also
involved
in
the
fraud.
Mr.
CMO
had
legally
changed
his
name
some
years
earlier,
which
had
helped
to
obfuscate
the
related
party
nature
of
some
of
the
key
transactions.

Armed
with
this
information,
the
company
successfully
pursued
civil
recovery
of
its
stolen
assets,
and
documentation
was
turned
over
to
the
U.S.
Attorney
for
criminal
charges.
They
obtained
phone
call
recordings
in
which
Mr.
CMO
was
inquiring
about
countries
without
extradition
treaties
with
the
US,
trying
to
figure
out
how
he
and
his
assets
could
escape.

Ultimately,
Mr.
CMO
pleaded
guilty
to
wire
fraud
and
contempt
charges,
receiving
a
four-year
prison
sentence,
five
years
of
supervised
release,
and
an
order
to
pay
restitution.

CRA’s
Forensic
Services
Practice
was
proud
to
deploy
the
roster
of
technical
skills,
sophisticated
tools,
investigations
experience,
and
professional
judgment
to
nimbly
bring
this
assignment
to
a
successful
close.