Geoffrey S. Berman, the United States Attorney for the
Southern District of New York, announced that JOHN FARCHIONE, a former Manager
at a public utility company (the “Public Utility”), pled guilty today in
Manhattan federal court to four felony counts in connection with a scheme to
steal more than $4 million from the Public Utility and its customers between
2005 and 2016. During that time period,
FARCHIONE obtained and kept millions of dollars in customer payments intended
for the Public Utility and then manipulated the Public Utility’s computer and
accounting systems to conceal the theft.
FARCHIONE pled guilty before U.S. District Judge J. Paul Oetken to one
count of honest services fraud, one count of mail fraud, one count of
conspiracy to commit mail fraud, and one count of aggravated identity theft.
U.S. Attorney Geoffrey S. Berman said: “As he has now admitted, for more than a
decade, John Farchione abused his position to steal millions of dollars from
his employer, a public utility company New Yorkers rely upon. We will continue to work aggressively to
protect New York’s public utilities and their customers from such brazen
criminal conduct.”
According to allegations contained in the Indictment and
statements made in related court filings and proceedings:
From at least in or about 2005, up to and including in or
about November 2016, FARCHIONE orchestrated fraudulent schemes that allowed him
to steal millions of dollars from the Public Utility.
FARCHIONE, who was employed by the Public Utility as a
manager in Customer Operations during the relevant time period, devised and
implemented the scheme, using his knowledge of the Public Utility’s billing and
payment processes. FARCHIONE carried out
the scheme with a co-conspirator, Louis Bendel, who has previously pled guilty
in connection with his role in the scheme.
Bendel operated a business that aggregated payments from customers of
the Public Utility for the purpose of passing such payments on to the Public Utility. FARCHIONE and Bendel effected the fraud in
part through conspiring to submit fraudulent checks and payments to the Public
Utility, in amounts owed by customers who provided cash to Bendel believing he
would submit those payments to the Public Utility on their behalf.
In fact, however, FARCHIONE and Bendel kept the customer
cash for themselves and submitted fraudulent checks to the Public Utility that
purported to convey aggregated payments by multiple customers of the Public
Utility. FARCHIONE, by virtue of his
position as an employee of the Public Utility, was able to conceal the nature
of the fraudulent checks, and thereby perpetuate the fraudulent scheme, through
his knowledge of and access to the Public Utility’s account payment system.
Additionally, FARCHIONE and Bendel conspired to create false
and fraudulent positive balances on certain customer accounts related to the
scheme, and then caused the Public Utility to issue refunds that were not
actually due, the proceeds of which were obtained and shared by FARCHIONE and
Bendel.
* * *
FARCHIONE, 65, pled guilty to one count each of honest
services fraud, which carries a maximum sentence of 20 years in prison; mail
fraud, which carries a maximum sentence of 20 years in prison; conspiracy to commit
mail fraud, which carries a maximum sentence of 20 years in prison; and
aggravated identity theft in connection with the fraudulent schemes, which
carries a mandatory sentence of two years in prison, to be served consecutively
to any other sentence imposed. The
statutory maximum penalties are prescribed by Congress and are provided here
for informational purposes only, as any sentencing of the defendant would be
determined by the judge. In addition,
FARCHIONE will be subject to financial penalties including restitution and
forfeiture in amounts to be determined at sentencing.
FARCHIONE is scheduled to be sentenced by Judge Oetken on
November 16, 2018.
Mr. Berman praised the outstanding work of the Federal
Bureau of Investigation.
This case is being handled by the Office’s Public Corruption
Unit. Assistant U.S. Attorneys Alex
Rossmiller and Sidhardha Kamaraju are in charge of the prosecution.
No comments:
Post a Comment