Personal Use of Corporate Credit Cards Results in Wire Fraud Charge in Federal Court

By Brocken Inaglory (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0) or GFDL (http://www.gnu.org/copyleft/fdl.html)], via Wikimedia CommonsAn executive assistant’s personal use of corporate credit accounts resulted in a federal charge of wire fraud. United States v. Coulman, No. 3:14-cr-02424, information (S.D. Cal., Aug. 27, 2014). Prosecutors alleged that the defendant used corporate credit cards to purchase vacations, electronics, clothing, and other goods, as well as attempting to conceal her activities from her employer. Prosecutors got a bit creative, alleging a connection between the defendant’s scheme and interstate commerce in order to establish federal jurisdiction. The defendant waived indictment and entered a guilty plea on the day federal prosecutors filed the information. The court sentenced the defendant in August 2015 to 21 months in prison and ordered her to pay the amount she was accused of misappropriating—nearly $1 million—in restitution.

According to the government’s information, the defendant began working for Hewlett-Packard (HP) in 2000, and she remained there until 2012. She worked as the executive assistant to one of the company’s vice presidents during the last four years of her employment. Part of that job involved “review[ing] monthly credit card statements and submit[ting] the related expense reports, receipts, and supporting documentation to HP program administrators.” Id. at 1-2. She also responded to questions from program administrators about expenditures and expense reports. Prosecutors noted that she had access to the vice president’s email account, “which included the ability to delete emails received by, and send emails from [that] account.” Id. at 2.

Prosecutors described a scheme by which the defendant used corporate credit cards for multiple unauthorized expenses, including over $350,000 for a business operated by her brother, more than $100,000 at a “resort spa,” id. at 3, airfare and hotels for trips to Hawaii and Europe, and purchases at the Apple Store and several high-end department stores. The total amount of fraudulent expenditures, according to the FBI, exceeded $954,000.

In some cases, according to prosecutors, the defendant would create fraudulent invoices and expense reports for legitimate business expenses to cover up personal purchases. Prosecutors also claimed that she “would intercept emails from HP program administrators to [the VP] that questioned the defendant’s credit card expenditures,” id., and that she would use the VP’s email account to create fraudulent approvals of expenses.

The government charged the defendant with a single count of wire fraud and asserted a claim for civil forfeiture. 18 U.S.C. §§ 1343, 981(a)(1)(C). A federal wire fraud charge requires proof of a transmission “by means of wire, radio, or television communication in interstate or foreign commerce.” To meet this burden, prosecutors creatively alleged that the defendant sent an email to the VP “on or about April 19, 2012,” Coulman at 5, in response to questions about suspicious expenditures. The email traveled from the defendant’s computer in San Diego to “the HP domestic email server located outside California,” id., and back to the VP’s computer in San Diego.

A single count of wire fraud could result in up to 20 years in prison and a fine of up to $250,000. 18 U.S.C. §§ 1343, 3571(b)(3). Almost one full year after the defendant pleaded guilty, the court sentenced her to 21 months in prison, followed by three years of supervised release. It did not impose a fine but ordered her to pay restitution of $954,292.31, beginning at a rate of $3,000 per month during her supervised release period.

These blog posts are meant to be illustrative only. Unless expressly stated to the contrary herein, these matters are not the result of any legal work of Michael J. Brown, but are used to communicate a particular point of view. Michael J. Brown does not claim credit for any legal work done by any lawyer or law firm either generally or specifically, with respect to the matters contained in this blog.

Michael J. Brown, a board-certified federal crimes attorney, has fought for over 20 years for the rights of people charged with alleged state and federal offenses in west Texas courts. To schedule a confidential consultation with an experienced and skilled criminal justice advocate, contact us online or at (432) 687-5157 today.

More Blog Posts:

Firearms Distributor Indicted for Mail and Wire Fraud for Alleged Bribes, Kickbacks, Texas Criminal Lawyer Blog, September 26, 2014

Appellate Court Affirms Sentence in Wire Fraud and Money Laundering Case, Rejects Defendant’s Argument of a Substantively Unreasonable Sentence – U.S. v. Dao, Texas Criminal Lawyer Blog, September 26, 2012

Ringleaders in Massive Texas Wire Fraud Scheme Sentenced to Federal Prison, Texas Criminal Lawyer Blog, August 31, 2012

Photo credit: By Brocken Inaglory (Own work) [CC BY-SA 3.0 or GFDL], via Wikimedia Commons.