Educate owners and leaders of small and mid-sized businesses on financial crimes associated with their handling of business finances.
Upon completion of this Case Study, participants will be able to:
- Understand aspects of handling financial business transactions;
- Describe penalties for mishandling financial business transactions;
- Understand how other people’s actions can cost you your business;
- Identify ways to avoid being a target of a federal criminal investigation; and
- Explain the difference between a Criminal Information in comparison with a Criminal Indictment.
Business owners, business leaders, white-collar professionals
Embezzlement, Wire Fraud, Tax Evasion, Tax Fraud, Aggravated Identity Theft, Criminal Information
Current State of the Industry
Small and mid-sized business owners and leaders are often pulled in many directions such as managing their business, hiring new employees, conducting payroll, marketing, accounting, and many other functions. When some business owners face personal or professional challenges and face pressure from the outside world, they seek easy and quick solutions without considering all of the consequences. They do not realize the power federal investigators wield and may not know that government agencies will investigate wrongdoings, intentional or not. People who do not view themselves as “criminals” frequently find themselves being accused of white-collar crimes. In this case, we see a business owner make poor decisions regarding the company’s finances and in result face a federal investigation. In addition, we see the consequences that followed.
Business owners make dozens of important decisions for their company daily. Some do not consider how their decisions could bring them under government scrutiny. Knowledge of consequences may result in people making fewer decisions that could result in investigations and prosecutions for white-collar crimes.
A small business owner improperly took money from his own company to pay for an extravagant lifestyle. Several other small business owners were pulled into this scheme, as well as an internal bookkeeper, all of whom became targets of federal criminal investigations for white-collar crimes. The indictments against these small business owners expose each to decades in prison and loss of financial resources. Other small business owners, business leaders, and white-collar professionals can learn a lot from these defendant’s mistakes.
This case study profiles Caesar DiCrecchio, a 60-year-old grocery store owner in Philadelphia, PA. All of the information in this background comes from three sources:
- the criminal information against DiCerrchio,
- an FBI press release, and
- a newspaper article.
In this case study, federal prosecutors submitted a Criminal Information against DiCrecchio with a federal magistrate judge.
A criminal information consists of a formal charging document that describes the criminal charges against a person and the factual basis for those charges. Unlike a criminal indictment, however, a criminal information does not require the empaneling of a grand jury and a formal vote to indict. Instead, the prosecutor will present the information to a judicial officer, usually a magistrate judge, who examines the information and decides whether probable cause exists that a crime occurred.
According to the Information, DiCrecchio has been charged with two counts of wire fraud, one count of conspiracy to commit wire fraud, one count of money laundering conspiracy, one count of aggravated identity theft, and four counts of tax evasion.
Federal investigators and prosecutors allege DiCrecchio caused more than $7.8 million in losses to his business, Philadelphia Wholesale Produce Market. Authorities allege DiCrecchio, former President and CEO of the Produce Market, exercised control over every aspect of the market, including expenditure of funds, and other accounting and reporting requirements.
According to the FBI Organized Crime Task Force, DiCrecchio has been accused of defrauding his business by using company funds to pay for a beach house, converting some funds to cash, making payments to friends and relatives, making a payment of consumer debts, and for working at his primary residence.
DiCrecchio allegedly concealed these expenditures in the market’s books and records by listing those payments to appear as legitimate business expenditures. DiCreccchio allegedly notated the payments as maintenance, snow removal, insurance, legal fees, and other false expenditure entries.
Federal investigators also accused DiCreechio of aggravated identity theft. According to the FBI Organized Crime Task Force, DiCreechio cashed checks at a currency exchange using the name of an unwitting victim as the payee. Aggravated identity theft occurs when someone knowingly transfers, possesses, or uses without permission, the identification of another person, and then uses that identification during and/or in relation to the act of a particular felony violation.
Lastly, DiCrecchio has been accused of willfully attempting to evade federal income tax over several years by failing to report more than $2.1 million in income from 2014 through 2017. Federal prosecutors allege DiCrecchio failed to report as income the proceeds of his fraud on the market, as well as other income.
We can define tax fraud as knowingly or purposely giving false details to the IRS on tax returns. Individual people who are convicted of tax fraud may face severe consequences. They may be ordered to pay a fine of up to $250,000, sentenced to a maximum of three years in prison, or both. Additionally, those found guilty of tax fraud may also be required to repay the prosecution costs.
Using deceit, concealment or other affirmative acts to dodge or defeat their taxes may be tax evasion. A tax evasion conviction carries potentially serious penalties. Those found guilty of or who plead guilty to this offense face a maximum of $250,000 in fines and may face up to five years in prison, or both. Furthermore, judges may order people convicted of tax evasion to pay back the costs associated with their prosecution.
According to the information presented by the government, DiCrecchio made decisions with a clear intention to deceive his company’s board of directors. Prosecutors said he schemed to take money he had no entitlement to and hid the transactions from his company.
DiCrecchio now faces a difficult predicament as a result of the charges brought against him. He faces over 100 years in prison if convicted on all counts. Prosecutors may agree to limit DiCrecchio’s exposure to prison, provided that he pleads guilty early and works on a mitigation strategy.
If DiCrecchio pleads guilty, he will undergo a presentence investigation with a probation officer. The probation officer will complete a report, calculating a “loss amount” that will influence the sentence length. DiCrecchio will have to decide whether he wants to accept responsibility and plead guilty or he may choose to put the government to the test by proving the case to a jury beyond a reasonable doubt. The decision he makes going forward will have monumental influences on his life. Depending on the plea or the outcome of a verdict, DiCrecchio could spend the rest of his life in federal prison.
Like most defendants, he likely will plead guilty to avoid the downside of being convicted at trial. His best option will be to craft an effective mitigation strategy. That strategy should show the judge that DiCrecchio has a full grasp of the crime he committed. His mitigation strategy should show empathy for the victims of his crime, show what he has learned from the experience, and help the judge understand what steps he will take to make things right.
As a result of this situation, two other small business owners now face a federal criminal investigation;three individuals face time in prison.
Small and mid-sized business owners and leaders, and white-collar professionals can prevent this from happening to them with proper training. At Compliance Mitigation, we recommend more adequate training for small and mid-sized business owners, business leaders, and white-collar professionals to profile the personal stories of people that unknowingly broke the law in the ordinary course of doing business. When people understand how authorities view crimes and the consequences that follow, like security fraud, or lying to federal officers, they may be more inclined to make law-abiding decisions.
- Former President of Philadelphia Wholesale Produce Market Charged with Stealing $7.8 Million from His Employer | USAO-EDPA | Department of Justice
- Former President of Philadelphia Wholesale Produce Market Charged with Stealing $7.8 Million from His Employer | USAO-EDPA | US DOJ News Today