Tuesday, July 1, 2008

Former Home Depot Employee Pleads Guilty to Vendor Kickback Scheme and Tax Evasion

The DOJ has announced that Anthony M. Tesvich of Atlanta, Georgia, has pleaded guilty to one count of conspiracy to commit wire fraud and three counts of tax evasion. The charges stemmed from a scheme to defraud Home Depot.

According to the United States Attorney for the Northern District of Georgia, David E. Nahmias, "This defendant has now admitted to taking millions of dollars in secret payoffs from Home Depot's vendors and not reporting or paying taxes on that corrupt income. Vendor kickbacks to corporate employees corrupt fair competition and the honest operations of American businesses. Those who pay, receive, or solicit such payoffs may face federal prosecution."

This is a particularly interesting case because we see here two of the most common charges from federal prosecutors in a financial crimes case. The first, conspiracy to commit wire fraud, is often utilized because wire fraud is one of the easiest federal criminal statutes to satisfy and the conspiracy tag allows for simple inclusion of all conduct relevant to the conspiracy for purposes of sentencing. The second, tax evasion, allows prosecutors to incorporate monies into the prosecution that might not easily be shown to be unlawful payments, but which are clearly income for purposes of the IRS reporting requirements. One need only look to the famous prosecutions of Al Capone or Atlanta Mayor Bill Campbell to see the usefulness of a tax charge.

See the DOJ Press Release here:

No comments: