An IT manager in the US was arrested on Friday for allegedly embezzling about $370,000 from an unidentified non-profit organization.
Prosecutors said Kyriakos 'Rick' Kapiris, 35, of Northborough, Massachusetts, was indicted on two counts of wire fraud and one count of money laundering.
Released on $10,000 bond to await the resolution of the charges, Kapiris is alleged to have used his Sturbridge-based organization's credit cards to purchase IT equipment and services from firms he supposedly created to fake sales and embezzle funds.
From around December 2016 through May 2020, according to the indictment, "Kapiris engaged in a scheme to defraud [his employer] by creating false purchase orders and invoices reflecting supposed purchases of IT equipment, and by making credit card payments to online accounts that he controlled."
In late 2015, Kapiris, it's claimed, set up an Amazon vendor account under the name NetworkingPlus, and in 2016 set up a Square vendor account under the name of an unidentified legitimate business. And in 2019, he's said to have set up a second Square vendor account under the name of a different legitimate business.
Square says it conducts identity verification for individual vendors who register for an account and for all business owners when registering as a company. The court filing does not provide further detail about the type of Square account created.
Square did not immediately respond to a request to explain how one might set up an account using the name of an existing business despite its purported verification system.
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"Beginning in 2016," the indictment says, "Kapiris used by [the non-profit's] administrative credit card and personal IT Department credit card to make online payments to the NetworkingPlus Amazon account, the Business #1 Square account, and the Business #2 Square account for products that were never purchased or provided."
The indictment says that the administrative credit card required approval, for which Kapiris submitted fabricated purchase orders.
Kapiris is said to have transferred the embezzled funds to his personal account at Bank of America and to have used the money for his own benefit and to pay a contractor for work on a new residence.
Tim Watkins, Assistant Federal Public Defender of the District of Massachusetts and Kapiris's legal representative, declined to comment.
If convicted, Kapiris faces up to 20 years in prison, three years of supervised release, and a $250,000 fine for fraud, and up to 10 years for money laundering. But these are maximums and most sentences are far less.
Damn it feels good to be a gangsta
In 2020, according to the US Sentencing Commission [PDF], the mean sentence length for fraud/theft/embezzlement in months was 19 and the median sentence length was eight while the mean time of imprisonment was 26 and the median time of imprisonment was 18 months.
The disparity between the sentence issued and actual time of imprisonment follows from the inclusion of zero values when the sentence is probation, which reduces the mean and median figures for sentence length.
The way these crimes get categorized also affects the averages. In 2017, when the US Sentencing Commission presented fraud figures separately from theft and embezzlement [PDF], the mean sentence was 26 months and the median was 15 months.
About 96.5 per cent of fraud cases in the US conclude with a plea deal while the remaining 3.5 per cent go to trial. Last year, the prosecution of corporate and white collar crime reached an all-time low since tracking began in 1986. ®