Investigation of $10 million embezzlement and diversion by company’s former CMO

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CRA’s Forensic Services Practice was retained by Cooley LLP’s White Collar Defense & Investigations Practice, on behalf of the board of a national insurance company, to investigate allegations of embezzlement and diversion by the company’s former Chief Marketing Officer (“former CMO”). The legal team was led by Cooley LLP partners Matthew Kutcher and Kristine Forderer.

The former CMO was eventually arrested, pled guilty to wire fraud and contempt charges, and was sentenced to 51 months in prison, plus five years of supervised release, and restitution.

CRA professionals deployed a broad range of core competencies, including forensic accounting, financial statement reporting (including SAB 99 analysis), asset searches, business intelligence, shell company analysis, genealogical research, review of the files from a 30-year-old murder case, a critical link to a recently uncovered multi-year mortgage fraud scheme in Atlanta, social media preservation and analysis, digital forensics, and eDiscovery of almost 2 million documents.

In addition to helping the company support its year-end financial statements and disclosures, improve internal controls, enhance hiring due diligence practices, and engage with its auditors, our team’s collective work helped uncover and preserve the evidence needed to prepare an insurance claim, seek civil restitution, and successfully engage with the local U.S. Attorney’s Office.

As the Sentencing Memorandum summarized: “[The former CMO] abused his position as a high-level executive to steal more than $10 million from his employer. His sophisticated scheme involved shell companies, inflated contracts, and a stolen identity. [The former CMO] then spent some of the fraud proceeds on luxury items and tried to shield the remainder from the Court’s jurisdiction.” These items included multiple luxury homes, a plane, plastic surgery, luxury watches, and a $165,000 Mercedes SUV. He later got caught trying to obtain citizenship in a country that would not extradite him back to the U.S., and shift assets there.

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