On January 2, 2014, Gregg Pierleoni was indicted by a federal grand jury sitting in White Plains, New York, for mail and wire fraud. The press release alleges that in his role as Chief Financial Officer, Pierleoni embezzled approximately $5.7 million dollars from his employer, a Westchester-based moving and storage company.

According to the indictment, as CFO Pierleoni was in charge of the company’s operating account, and therefore had the necessary access to withdraw and transfer funds from the account. The indictment alleges that from October 2006 through April 2013, Pierleoni was able to embezzle more than $5.7 million in company finances for personal expenditures.

Count I relates to mail fraud, 18 U.S.C. § 1341, by which Pierleoni allegedly mailed two checks to American Express from the company’s account to pay the balance on his personal credit card. Count II relates to wire fraud, 18 U.S.C. § 1343, whereby Pierleoni allegedly made an online payment to his American Express account from the company’s account. The indictment also contains a forfeiture allegation seeking the proceeds of the alleged fraudulent scheme.

Pierleoni was originally charged by criminal complaint under seal on October 10, 2013, and made his initial appearance on October 16, 2013. Since that time, the complaint has been replaced by an indictment. The earlier complaint demonstrates that a federal grand jury was not impaneled until several months later.

While at first glance the indictment in this case only sets forth two counts against Pierleoni, the penalty in fraud cases is determined under the sentencing guidelines by the loss amount. In other words, the fact that there are just two counts in the indictment does not take away from the significant sentencing implications at issue. Further, the sentencing guidelines for fraud cases provide numerous sentencing enhancements depending on additional factors, such as the number of victims or whether the offense involved theft from another person. Thus, Pierleoni’s sentence, whether he decides to plea or go to trial, will eventually be decided based upon the loss amount of $5.7 million as well as any enhancements under the guidelines.

As such, a defense in this case is going to rely heavily on the numbers. The first step should involve the review and comparison between the company’s bank records and Pierleoni’s bank records in order to establish the underlying transactions and determine how the government is calculating the loss amount.  Next steps include discounting the government’s loss amount and determining an alternative number to work with. For example, if Pierleoni ever deposited funds back into the company’s account, it may arguably decrease the loss amount.

Depending on the various accounts implicated and the total transactions over the course of seven years, a forensic accountant may prove to be beneficial for Pierleoni’s case. A lower loss amount equates to a lower sentence, which is in the best interest of Pierleoni for sentencing purposes.

The author of this blog is Margaret S. Ververis, an attorney specializing in Federal Criminal Defense matters with the law firm of Ferrari & Associates, PC. If you have any questions please contact her at 202-440-2581 or ververis@ferrariassociatespc.com.

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