Former Finance Director Arrested For Embezzling $8.5 Million From Gulfstream Aerospace

From the Associated Press:

A former finance director with Gulfstream Aerospace Corp. was arrested late last week in California and charged with stealing at least $8.5 million from Gulfstream’s Long Beach and Las Vegas operations.

Marvin Jay Caukin of Calabasas was held without bail after his initial appearance in U.S. District Court Friday on charges of identity theft and conspiracy to launder money and commit mail fraud, according to FBI spokeswoman Laura Eimiller.

In court papers, FBI Special Agent Sherine Ebadi said Caukin, 66, was employed as finance director of Gulfstream’s Long Beach and Las Vegas operations between 2001 and 2013 when he orchestrated a sophisticated embezzlement scheme using friends and relatives to set up phony businesses — with familiar-sounding names like Jetco Aviation Services — to bill the company for services never provided.

Caukin allegedly approved payments to the bogus companies and the proceeds were then funneled back to him and a number of co-conspirators. As of Tuesday, the co-conspirators had not been charged.

Caukin, who did not enter a plea in his Friday court appearance, goes back to court on Monday for a bail hearing.

His lawyer had no comment.

A spokeswoman for Savannah-based Gulfstream, a wholly owned subsidiary of General Dynamics, said Tuesday the company had no comment.

According to Beatriz Valenzuela of the Long Beach Press-Telegram, federal investigators were made aware of the situation shortly after Gulfstream began looking into financial irregularities at the offices Caukin supervised. The company fired him in May 2013 when it learned he had lied on his initial application in 2000, indicating he had not been convicted of a felony within the last seven years.
Caukin had, in fact, spent nearly three years in federal prison in the mid 1990s for embezzling $2.4 million from USA Petroleum Corp., where he was finance director. He pleaded guilty in that case to wire fraud.

According to court documents, Caukin applied for the Gulfstream job only four months after he was released from prison for a parole violation.

Investigators say Caukin spent the money he embezzled from Gulfstream on two houses, including a $2 million Calabasas residence that he purchased with cash; fancy cars, pricey restaurants, five-star hotels, expensive jewelry and luxury furnishings as well as mundane expenses such as insurance premiums, utilities and other living expenses.

Eimiller said investigators with the FBI and the U.S. Postal Inspection Service searched Caukin’s two homes Friday and recovered several thousand dollars in cash from his Mercedes Benz.
Two of the co-conspirators, including his 46-year-old son, were unindicted accomplices in Caukin’s previous scheme, according to Ebadi.

The Associated Press reported that another co-conspirator, who was authorized to handle bank accounts for phony companies and rented mail boxes where checks from Gulfstream were sent, is believed to run an Orange County escort service that was paid more than $55,000 between 2001 and 2012 for catering and support at such events as the Gulfstream company Christmas party.

Those events did not take place, and Gulfstream never hired the company, according to documents.