Michael Stortini – Caught in the case of embezzlement?
An employee pension plan embezzlement and wilful tax evasion were admittedly committed by a Wilmington development company co-owner.
The 52-year-old Michael Stortini of the Frank Robino Companies LLC acknowledged misusing more than $600,000 from an employee 401(k) plan to pay for business costs as well as failing to pay the Internal Revenue Service more than $450,000 in payroll taxes over two years. According to federal authorities, Michael Stortini also stole more than 900,000 from business accounts for his use.
The business experienced financial issues in 2008, according to Assistant U.S. Attorney Shawn Weede.
Michael Stortini announced the company was terminating the 401(k) plan, but instead of returning assets to employees, he used them to pay business expenses. Weede claimed that Michael Stortini also took money from other corporate accounts for himself and spent almost $500,000 at gambling establishments.
At sentencing on March 11, Michael Stortini now faces a maximum penalty of $1.2 million in fines and five years in jail on each offense.
Michael Stortini encountered a sentence for embezzling the retirement funds of his workers
Michael Stortini, the former managing member and part-owner of the Frank Robino Companies (“FRC”), a Delaware real estate development firm, was sentenced yesterday by United States District Court Judge Richard G. Andrews to 24 months in prison for embezzling $606,500 in retirement funds from his employees’ 401(k) plan as well as failing to pay hundreds of thousands of dollars in payroll taxes to the Internal Revenue Service (“IRS”). In addition to the prison sentence, Judge Andrews mandated that Michael Stortini pay $638,468 to the IRS and restitution, with interest, to the 401(k) plan participants.
Former managing member and part-owner of the Frank Robino Companies (“FRC”), a Delaware real estate development company, Michael Stortini, was sentenced to 24 months in prison yesterday by United States District Court Judge Richard G. Andrews for stealing $606,500 in retirement funds from his employees’ 401(k) plan and failing to pay the Internal Revenue Service (“IRS”) hundreds of thousands of dollars worth of payroll taxes. Judge Andrews also ordered Michael Stortini to pay the IRS $638,468 in back taxes and pay the participants in the 401(k) plan restitution with interest, in addition to the prison sentence.
According to Judge Andrews, the two-year term was necessary to encourage adherence to the law and dissuade others from engaging in similar trust-breaching behavior. When imposing sentencing, Judge Andrews recalled a proverb he had heard in law school: “When you have a fiduciary relationship for money like that, your money is white, the money you control is black. And if you combine the two, you’ll end up with black and white stripes on your clothing.
According to Akeia Conner, special agent in charge of IRS Criminal Investigation, it is a severe felony when businesses violate their fiduciary obligations to their workers by putting money in their wallets that were meant to secure the futures of those workers. Michael Stortini‘s acts harmed individuals who were financially tied to him, but they also hurt honest taxpayers who had to deal with the strain that Michael Stortini‘s actions put on the tax system. Tax crimes have been falsely described as having no victims, however, this is false because everyone pays when someone tries to avoid paying their taxes.
Shawn A. Weede, an assistant US attorney, was in charge of the prosecution.
How does embezzlement work?
A sort of financial fraud called embezzlement occurs when someone steals funds or assets that have been entrusted to them and utilizes them for something other than what was intended. The person or party stealing the assets is aware that what they are doing is against the law, yet they nonetheless do it intending to acquire more assets secretly from the company. Depending on how much is taken, embezzlement can happen on a small or large scale and is punishable by steep fines and prison time.
This may have several detrimental repercussions on a company, such as an overall loss of assets, a disruption in operations, an accounting imbalance, and a decline in trust. The corporation ultimately bears the brunt of this financial crime, with the loss of confidence likely having the most lasting consequences. Since trust is the cornerstone of company and consumer connections, it is challenging to rebuild it after it has been lost in any relationship. Hence, it is crucial to have a thorough understanding of both your staff and clients.
What distinguishes money laundering from embezzlement?
Understanding the distinction between money laundering and embezzlement is crucial. Although both financial crimes include large-scale asset transfers, the fundamental distinction between the two is that while money or assets obtained through embezzlement are obtained legitimately and then misappropriated for other uses, those obtained through money laundering are obtained illegally and then concealed.
What is Embezzlement?
An embezzlement is a form of financial fraud in which a person steals funds or assets that have been entrusted to them and uses them for something other than what was intended.
The owner of the business might not even be aware that embezzlement is taking place. Money that was earned legitimately is being taken out and used for nefarious or illegal purposes. Contrarily, money laundering refers to the use of illegally obtained funds for potential criminal or illegal activities.
What signs might there be of embezzlement?
You may become more aware of potential occurrences of theft within your firm as a result of warning indications. There are a few warning signs that could catch your eye, such as the following:
-Unexpected changes in finances could be a sign that money is being spent improperly.
-Overly defensive employees who might prefer to work alone or who refuse to turn over records.
-Financial distress indicators that, if someone becomes desperate enough, could indicate a future risk of theft.
-Signs of unhappiness that could lead someone to feel justified in stealing money from the business.
-Issues with transaction records, such as missing receipts or potential file corruption.
These are only a few warning signs that need to be remembered and followed. To motivate you to conduct further research, you should pay attention to more than one sign rather than just one. Furthermore, a behavior that has changed rather than a behavior that has always existed should trigger concerns.
How do you stop embezzlement?
The most crucial factor is how to prevent embezzlement now that we understand what it is and how to recognize it. The main factor is having a security measure. The most important thing is to know your consumers (or staff). To have complete faith in individuals engaged, a KYC Check should be implemented. A method of requirements based on the demands of the firm is used to verify identity.
To prevent the movement of funds and assets from illicit activities into the legal, financial, and economic cycles, anti-money laundering (AML) should also be adopted to monitor and check activity and transactions.
With the aid of IDnow’s tools, KYC and anti-money laundering can both be merged. Have complete faith in your customers and staff by securely vetting them and keeping an eye on what they do so you can anticipate any potential annoyances.
What Is Embezzlement Punishment Like?
Both civil and criminal penalties are available for embezzling. Penalties might include incarceration as well as monetary fines and restitution.
What Exactly Is a White Collar Crime?
A business professional who violated trust for financial benefit is said to have committed a white-collar crime, which is a nonviolent offense. Fraud, theft, forgery, embezzlement, money laundering, and other fraudulent activities are examples of white-collar crimes.
