back to article Five ripped off IT giant with $7M+ in bogus work expenses, prosecutors claim

Five people have been accused of pulling off a "brazen" scam that involved submitting more than $7 million in fake work expense claims to an IT consultancy to bankroll hotel stays, a cruise, visits to strip clubs, and more. Mark Angarola, Allison Angarola, Jose Garcia, Michelle Cox, and Lisa Mincak were all arrested and …

  1. Rikki Tikki

    This went on for nearly 9 years without being found out? Where were the auditors?

    Leaving aside the lax internal controls, maybe the 'unnamed company' had cut back on (internal and external) auditors, on the assumption everything would be OK.

    1. Pete Sdev

      In all fairness here we've an allegedly group conspiracy including one individual responsible for approving expenses submitted by others.

      That's harder to detect than one individual fiddling their expenses.

      Late is better than never.

  2. MatthewSt Silver badge

    These Enid Blyton books get darker and darker!

    1. David 132 Silver badge
      Happy

      Instead of holidays with Uncle Quentin at Kirrin Island and lashings of ginger beer, it's now limo rides to cigar bars and gentlemen's clubs!

      Why do they always feel the need to update childhood classics for an "edgy" modern audience???

      1. ChrisElvidge Silver badge

        Lashings

        Lashing of hard-boiled eggs as I remember. Five go down to the Sea

        See also: http://www.enidblytonsociety.co.uk/forums/viewtopic.php?t=4824

        1. Scott 53

          Re: Lashings

          Depending on the kind of "gentlemen's clubs" they frequented, there may have been lashings of lashings.

        2. David 132 Silver badge

          Re: Lashings

          Honestly, I'm a little disconcerted that my memory was able to haul the names "Uncle Quentin" and "Kirrin Island", unprompted and without recourse to google, from a memory pit 40+ years deep.

          And yet I still can't remember my nieces' birthdays.

          Bah :)

          1. The Dogs Meevonks Silver badge

            Re: Lashings

            My first thought was that you'd googled them for effect.

            As an avid reader of the famous five and secret seven books as a kid... I can't really remember anything about them apart from the dog Timmy.

            I do however remember more about the comic strip presents 5 go mad in Dorset that I saw in my early teens... and the ex page three model Corrine Russell that had a part in it. :)

            1. Timbo

              Re: Lashings

              and thinking of "the ex page three model Corrine Russell that had a part"

              She played a small (blink and you'll miss it) role in the film Highlander (1986) as the "escort" who visits the hotel where the Kurgan was staying, playing the character "Candy".

              https://en.wikipedia.org/wiki/Corinne_Russell

              Scary bit: she's now 60 !!

  3. Anonymous Coward
    Anonymous Coward

    Crimes such as these may be good while they last, but.

    At the end of the road, they often result in jail (gentlemen’s club).

  4. Necrohamster Silver badge

    Wait, what??

    ” Additionally, Mark Angarola, Cox, and Garcia have been charged with tax evasion and failing to report their true income to the IRS, including proceeds from the alleged embezzlement scheme.”

    I didn’t realise that income from illegal activities was reportable for tax purposes.

    You learn something new every day.

    1. Doctor Syntax Silver badge

      Re: Wait, what??

      It was the IRS that finally got Al Capone.

      1. Necrohamster Silver badge

        Re: Wait, what??

        The WTF (for me anyway) in this case is that the IRS would take a % of money that was stolen from somebody else.

        Actually why am I surprised at all?

        1. David 132 Silver badge
          Happy

          Re: Wait, what??

          Interesting. Maybe it's a recent-ish rule change?

          There's a line at the end of Johnny Cash's "The Chicken in Black" (don't judge me) where he says "Well, I don't pay any income tax... you don't pay tax on money you steal" and I'd always taken that as gospel, because if you can't trust lyrics in a spoof song about a country singer getting his brain swapped with a chicken and a bank-robber, who can you trust?

    2. Anonymous Coward
      Anonymous Coward

      Re: Wait, what??

      It is in the colonies! "Guidelines published by the IRS ahead of the 2022 tax year explained how taxpayers can claim items they have stolen, or earnings from illegal activities."

    3. gfx

      Re: Wait, what??

      I think it only works if you don't use a bankaccount. That is why they don't like cash.

    4. Necrohamster Silver badge
      Big Brother

      Re: Wait, what??

      Ok, so I did a bit of digging on this:

      In James v. United States, 366 U.S. 213 (1961), the Supreme Court held that an embezzler was required to include his ill-gotten gains in his "gross income" for Federal income tax purposes.

      But...

      While embezzlers, thieves, and the like are forced to report their illegally acquired income for tax purposes, they may also take deductions for costs relating to criminal activity. For example, in Commissioner v. Tellier, 383 U.S. 687 (1966), a taxpayer was found guilty of engaging in business activities that violated the Securities Act of 1933. The taxpayer subsequently deducted the legal fees he spent while defending himself. The U.S. Supreme Court held that the taxpayer was allowed to deduct the legal fees from his gross income because they meet the requirements of §162(a), which allows the taxpayer to deduct all the "ordinary and necessary expenses paid or incurred during the taxable year in carrying on a trade or business."

    5. tyrfing

      Re: Wait, what??

      I suspect that a deep dive into the UK revenuers rules will find that you can be charged for not paying income tax on illegal earnings there as well.

      The revenuers don't really care about how you make your money; they want their cut.

      1. John Riddoch

        Re: Wait, what??

        Yes for UK, I studied accountancy in the early 90s and one of the things I learnt was that illegal earnings had to be declared to HMRC. I did wonder how many criminals did declare those earnings and whether HMRC (or Inland Revenue in those days) would pass that information along to the police...

        I suspect that part of the law serves two purposes - first, to put the boot into criminals by doing them for tax evasion as well as their crimes and secondly it's probably easier to prove "person hasn't declared earnings" than "these earnings are part of this criminal enterprise" a la Al Capone.

        1. Necrohamster Silver badge

          Re: Wait, what??

          "...whether HMRC (or Inland Revenue in those days) would pass that information along to the police..."

          Killing the goose that lays the golden eggs :D

          I found the HMRC guidance:

          https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim22010

          Turns out Ireland taxes criminal proceedings too:

          https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/tca/part04.pdf

  5. Boo Radley

    Digital Equipment Corporation & Me

    Just out of college in the mid eighties, I worked for DEC, along with several college friends. We were all in Systems or Field Service. I installed and serviced larger VAX machines, while my best friend serviced MicroVAXes. One fine day we all realized that Logistics, the department responsible for carrying spare parts, had terrible inventory control, as well as a lot of larger installations having their own on site spares. A scheme was hatched, we'd sign out parts for this or that customer, then return random similar parts as non-working, and I was tasked with selling these pilfered parts to dealers. The scheme really took off with the introduction of the MicroVAX II, as DEC wouldn't sell bare bones systems with just a box with the CPU board. Through some kind of fluke in pricing, we could buy a replacement KA630 CPU board for around $1,200. This was supposed to be a $9,600 part, and not meant to be sold on its own.

    Eventually the scheme fell apart, as 99% of such schemes do, and I got caught with my hand in the proverbial cookie jar, and was charged with federal charges of interstate transportation of stolen property. One of my friends was newly married, another was expecting his first baby, and as I was the only one that the FBI was interested in, I took the fall for everyone. Stupid move, due to my age, the perceived complexity of the scheme, and the dollar loss, I was handed a 15 year sentence. This was in the old days, when parole was still available to federal inmates, but an inmate still had to serve one third of the sentence, and hope for leniency from the parole board, who, it turned out, had never heard of that word. I ended up serving eight and a half years in federal prison, before being released to a halfway house, then the balance of my sentence to be served on parole, with very strict rules. Interestingly, within a year, my parole officer allowed me back into the used systems market, and for the next several years I made a decent living buying equipment from surplus and leasing companies and reselling to dealers all across the country. But I'd learned a huge lesson. Never again will I put my life and my future at risk, I don't even speed in my car.

    Side note: I spent most of my time in a relatively cushy prison/hospital complex, where I quickly landed a cushy job. At various times I shared my cell with Jim Bakker, the infamous televangelist, and a very interesting year with Lyndon Larouche, during his 1992 presidential campaign. He has an extremely intelligent man, though a tad bit crazy. I enjoyed our many talks about politics, religion, and the state of our country. He was also a racist POS. The rest of my time was spent with counterfeiters, bank robbers and drug dealers, along with a few corrupt judges, cops, and the former mayor of Syracuse, NY, who was genuinely crazy, in fact residing in the mental health unit.

    1. Pete Sdev
      Pint

      Re: Digital Equipment Corporation & Me

      Thank you for honesty, and additional kudos for not posting your story as AC.

      Have a [virtual] beer on me.

      Interestingly, within a year, my parole officer allowed me back into the used systems market,

      Well done to your parole officer though I wonder how on earth someone is to be rehabilitated when they're not allowed to work, it being presumably hard enough as it is gaining employment with a record.

      1. Boo Radley

        Re: Digital Equipment Corporation & Me

        With the rise of the internet, and in particular ebay, it gradually became more difficult to find good cheap equipment for resale. Eventually I moved to Texas, married a high-earning doctor, and spent a few years as a house husband and IT specialist for her clinic.

        When we eventually broke up, I took a job as a taxi driver, and after ten years driving, I bought out the owner, who was retiring. I'm enjoying my later years of life doing something that I've grown to love, and we provide a valuable service to our community. I now work more hours each week, 90+, than I've ever worked in my life, and I don't see a vacation in my future, but for the first time in my life I'm truly happy. I'm always looking at emerging tech as a means of making my business more efficient in this age of Uber and other competitors.

        My interest in old tech is still strong, and I've been keeping an old MicroVAX running nearly 40 years after they were first introduced. For a while on the 90s VAXes could be picked up surplus for literally a penny per dollar compared to their original price, and frequently free for the taking. Now that they've become rare, prices on parts have gone higher and higher for those of us keeping one running. I wish I'd foreseen that trend as I scrapped some very nice machines in the early 00s.

        1. David 132 Silver badge
          Pint

          Re: Digital Equipment Corporation & Me

          Fair play to you. I'm a firm believer that everyone deserves a second chance - we're all young once, we all make mistakes.

          It's the third, fourth, fifth, ... ninety-second... chances that the criminal justice system seems to give people these days that, well, test my good nature a little!

          Anyway, echoing the reply above - have another pint on this chilly Saturday afternoon, and give yourself a pat on the back for plowing a straight furrow in life in the end.

          1. doublerot13

            Re: Digital Equipment Corporation & Me

            +1 Fair play to you. Any one of us could have done the same when we were young. I look at my dumb sh*t with a mixture of shame, embarrassment and relief I didn't die or get caught.

            1. The Oncoming Scorn Silver badge
              Pint

              Re: Digital Equipment Corporation & Me

              I do hope your friends remember what you did for them.

              1. Boo Radley

                Spoiler Alert

                They didn't. All of them moved from DEC within a year or so of this event, mostly because they wanted to move up somewhere else. My best friend related that DEC management made his job "uncomfortable" after my arrest and his subsequent FBI interview, at which he disclosed nothing (through FoIA requests I got all the evidence used against me). Plus he was too intelligent to stay in his position much longer.

                But no one wrote to me, no one sent money for commissary, or gave me a helping hand when I got out. Every few years I talk with my former best friend, usually when I have a tough question regarding one of my MicroVAXes. As far as commissary money, my job in the prison was one of the highest paid, so I wasn't destitute. My partners, lawyer and the government got all my money, plus I ended up owing the IRS a ton of money, so I was on my own.

  6. Anonymous Coward
    Anonymous Coward

    Ripping off corporations?

    Only acceptable when it's tech outsourcers ripping off their customers.

    Used to work for a company who outsourced to a company that might well be involved in this little story. When staff were leaving, they often asked if they could transfer their mobile number, and managers routinely replied yes. It was only later that it was established that requesting a PAC code was being charged the outsourced tech provider as a "non standard service request" at £480 a pop.

    1. doublerot13

      Re: Ripping off corporations?

      Had one charge US $65,000 to sign a Java applet once. That was actually one of their lesser scams.

  7. J.G.Harston Silver badge

    Hotel stays, a cruise? That's small time. I'd be splurging on paying the mortgage and paying for groceries.

    1. tyrfing

      In some ways that's smart. Proceeds of crime can be confiscated.

      Pay your mortgage? The house is now proceeds and it's gone. Pay for a cruise? They can't take that experience.

      There are some rules about taking your residence if it's not proceeds. They can get around that, but it's more work.

      |

      Note: I am not a lawyer, nor even an American so I may be wrong on details.

      1. J.G.Harston Silver badge

        Ok, splurge on groceries and domestic fuel. Can't take that cabbage and gas off me after I've cooked and eaten it.

  8. ecofeco Silver badge

    I've seen similar

    I was hoping I could confirm one of those names was a person I had to deal with, but alas, even though it was the same time frame, it's been too long for me to remember their name.

    I'm not going to go into details, but I had a contract agency representative "chisel" an out of town expense claim that I had submitted. I made damn sure to keep both the original and the one they fiddled. That's when when I first learned the REAL importance of covering my ass.

    Same person who tried to directly screw me out of pay on another job a few years later. After raising holy hell, I am now permanently blacklisted from that agency. Got my money though. Don't miss the agency one bit either.

    But I really hope that person is on that list.

    1. The Oncoming Scorn Silver badge
      Coat

      Re: I've seen similar

      Years ago, another life a early retired neighbour used to pick up new cars (Birmingham\Longbridge) cash in hand\fuel vouchers & drive them to the dealership I worked at (Pumping LPG\delivering parts).

      Everyday I'd drop the receipts, credit card slips, cash into a chute that dropped into the safe, the young girl who was the recipient of that the next morning was pleasant, I left that employment & then I read in the local rag she was in court fiddling expenses\embezzlement & had pleaded guilty (IIRC).

      Turns out one of the salesman had challenged my neighbour over a slightly outrageous higher than his normal expenses claim for picking up a car in Birmingham, to whit he denied & produced his original credit card statements, going back through his records transpired she had taken a lot of cash by adjusting expenses claims of the neighbour & other off the record persons & pocketed the cash.

      1. Anonymous Coward
        Anonymous Coward

        Re: I've seen similar

        There are many schemes and scams to try and skim some cash off...

        One I know about from the early 1980's was at a company that had a lot of overseas agencies who got commission on any sales in that territory - even if sold directly on the basis that they were the first after sales point.

        The guy responsible for paying the commissions would put them quite quickly into an interest paying account of his own, and only actually pay out the agent when they started asking about overdue payments - and keeping the difference in the interest for himself.

        1. Robert 22

          Re: I've seen similar

          That scheme works best when interest rates are high, as they were in the early 80s.

  9. Anonymous Coward
    Anonymous Coward

    I can almost hear the excuses in court

    From the females involved.

    “The bad man made me do it, I was scared of him, sniff sniff, cry cry”

    And the white-knight judge will lap it up

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