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.

Fraud of the Week: Former Airline Employee & Co-Conspirator Indicted In $22 Million Embezzlment Conspiracy

According to the FBI, 2 men have been charged with defrauding Delta and Northwest Airlines of $22 Million:

Michael Yedor and Paul Anderson have been indicted by a federal grand jury on charges that they participated in a long-running scheme to defraud Delta Airlines of millions of dollars. Yedor was arrested in San Diego, Calif. on Saturday, June 21, 2014.

“The longevity and scope of the scheme to defraud Delta is simply astonishing,” said United States Attorney Sally Quillian Yates. “The indictment is an important first step in finally bringing these defendants to justice after so many years of engaging in fraud.”

...

 According to United States Attorney Yates, the indictment, and other information presented in court: Anderson had been an employee of Northwest Airlines since 1979. In 2008, Delta Airlines purchased Northwest. The two airlines merged into a single company in December 2009, at which time Anderson became an employee of Delta working in its Minneapolis, Minn., office.

The indictment alleges that, from at least 2004 through 2013, Anderson was involved with Yedor in a scheme to defraud Northwest and, later, Delta, by submitting numerous false invoices on behalf of a company, Airborne Voice and Data, purportedly owned by Yedor. The invoices sought payment from the airlines for goods provided and services supposedly rendered by Airborne Voice and Data, when in fact, both Anderson and Yedor knew that Yedor’s company had not provided any such goods or services.

The indictment also alleges that Yedor sent the invoices to Anderson to be approved. Anderson approved the fraudulent invoices, which caused the airlines to issue payments to Airborne Voice and Data. In exchange for approving each of the invoices, Anderson received a portion of the proceeds of the fraud. The indictment alleges that Yedor and Anderson caused Northwest and Delta to issue approximately $22 million in payments to Airborne on the basis of the false invoices between 2004 and 2013.

Yedor, 62, of Los Angeles, Calif., and Anderson, 57, of Apple Valley, Minn., were indicted on June 10, 2014, and have each been charged with conspiracy to commit mail fraud and ninety-six counts of mail fraud. The indictment was unsealed after Yedor’s arrest on Saturday, June 21, 2014.  ...

Update (1/12/2015):  Yedor has been sentenced to 10 years in prison in what is now believed to be a $36 million embezzlement scheme:

A Los Angeles man has been sentenced to 10 years in prison for defrauding Northwest and Delta Air Lines of more than $36 million over more than a decade, prosecutors said Friday.

Michael Yedor, 62, was sentenced by U.S. District Judge Timothy Batten after pleading guilty Oct. 20 to conspiracy to commit mail fraud. He also forfeited property such as a Beverly Hills mansion and a 71.9-foot yacht that he got from the fraud, prosecutors said.

"The scope and magnitude of this fraudulent scheme is astounding," U.S. Attorney Sally Quillian Yates said.

Yedor had been an employee of Northwest since 1979 and then Delta after the airlines merged in 2009. From at least 1999 through 2013, according to investigators, Yedor submitted invoices from a company, Airborne Voice and Data, that sought payment for goods and services that the company hadn't provided.

J. Britt Johnson, FBI special agent in charge of the Atlanta office, said Yedor's sentencing represents "the end of not only a complex scheme to defraud Northwest Airlines and Delta Airlines but also the resulting extensive federal investigation into those involved."

Yedor's accomplice, Paul Anderson, 57, of Apple Valley, Minn., a manager who had the authority to approve the payments, pleaded guilty to mail fraud on Sept. 15 and is scheduled to be sentenced Jan. 23.

2 New Jersey Women Plead Guilty To Conspiring To Embezzle $779K From Law Firm

From The Associated Press on 6/6/13:

Two women who worked at a central New Jersey law firm have been sentenced to prison after admitting they embezzled nearly $800,000 from their employer.

Marla Deptula of Sayreville received a 20-month sentence and Rose Crabbe of Plainfield received 15 months in federal court in Trenton on Thursday.

Both women had pleaded guilty to conspiracy to commit mail fraud. Deptula also pleaded guilty to subscribing to a false tax return.

They admitted writing checks to themselves from the Edison-based law firm's accounts and using the money to pay credit card bills, taxes and child care expenses. The U.S. Attorney's Office alleges hey tried to hide the scheme by altering the law firm's accounting records.

Deptula will be required to pay $705,000 and Crabbe will have to pay $74,000 in restitution.

Nevada Man Sentenced For Embezzling $2.5 Million From Electronic Lock Company

Juan Ramon Cabezas, 56, of Reno, Nevada, has been sentenced to 87 months in prison for embezzling some $2.5 million from Securitron Magnalock Corp. for whom he had been employed as chief financial officer.  According to prosecutors, over a period of nearly 7 years, from May 2003 to early 2010, Cabezas diverted company funds into his own personal retirement account as well as forged checks for his own benefit.  He pleaded guilty last October to charges of mail and bank fraud, tax evasion, identity theft and money laundering.  Cabezas, who was also ordered to pay a $50,000 fine, has reportedly already made restitution to the company in the amount of $3.5 million.

Read the story here and here.

Read the DOJ announcement of his indictment here.

Former Medical Exec In Missouri Accused Of Embezzling "Millions" - Supports Lavish Lifestyle

Dunard Morris

Dunard Winfield Morris, 48, of St. Charles, Missouri, has been charged with embezzling millions of dollars from Metropolitan Urological Specialists PC for which he had served CEO.  Morris is also accused of fraudulently posing as a military hero.  Morris is accused of spending much of the money to support an extraordinarily lavish lifestyle that included numerous luxury wristwatches, luxury automobiles, jewelry, guns, designer clothes, wine, expensive restaurants, a luxury apartment and international travel.  Morris allegedly used the company payroll system to increase his salary without authorization by hundreds of thousands of dollars.  Morris had fraudulently claimed he had been awarded the Navy Cross, according to reports.  Specifically, Morris has been charged with multiple counts of mail fraud and wire fraud as well as one count of stolen valor fraud.

Read the story here and here.

Update (9/21/12): Morris pleaded guilty to 3 felony counts of mail and wire fraud.

Update (12/17/12): Morris was sentenced to 78 months in prison and ordered to pay $5.6 million in restitution.

Fomer Minnesota Dept. of Revenue Auditor Sentenced For $1.9 Million Embezzlement

Pamela Marie Dellis, age 59, of Lindstrom, Minnesota, has been sentenced to 60 months in prison for embezzling some $1.9 million from the State of Minnesota, where she had been employed as an auditor.  According to prosecutors, Dellis, over a period of about 5 1/2 years, from January 2005 through September 2010, conspired with others to siphon the funds from state coffers by creating fraudulent refunds for her own benefit.  Dellis, who was originally charged last January, pleaded guilty to one count of conspiracy to commit mail fraud and one count of money laundering.  Two of Dellis' co-conspirators include Nancy T. Sondrall, age 55, of Brooklyn Center, Minnesota and her niece, Laurie R. Sondrall, age 29, of Minneapolis, Minnesota.  Nancy and Laurie Sondrall each pleaded guilty to conspiracy in March.  Laurie Sondrall was sentenced to 27 months in prison and Nancy Sondrall is scheduled to be sentenced on September 23, 2011.

Read the story here and here.

Read the DOJ announcement here.

Hat tip: FraudTalk reader Joe.