Educate small and mid-sized business owners and business leaders on financial crimes associated with handling their business’ finances.
About the Author:
My name is Jim Keating. I attended college in Philadelphia, PA and law school in Wilmington, DE. Our team at Compliance Mitigation offers services to help people develop mitigation strategies that lead to lower sentences if they’ve been charged with crimes.
Upon completion of this Case Study, participants will be able to:
- Understand aspects of handling business financial transactions;
- Describe penalties for mishandling business financial transactions;
- Understand how other people’s actions can cost impact an entire business;
- Identify ways to avoid being a target of a federal criminal investigation; and
- Explain the difference between a Criminal Information as opposed to the 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, managing their business, hiring new employees, payroll, marketing, accounting, and many other functions. When some business owners face personal or professional challenges and feel pressure from the outside, they seek easy and quick solutions without considering all of the consequences. They do not realize the power federal investigators wield. Government agencies will investigate wrongdoing, intentional or not. People that do not view themselves as being “criminals” frequently find themselves being accused of white-collar crimes. In this case, we see a business owner making poor decisions regarding the company’s finances, as well as three other people brought into a federal investigation as a result. We also see the consequences that followed.
Future State of the Industry:
Business owners make dozens of important decisions for their company daily, most, if not all, of them do not consider how government investigators will perceive them should they come under federal government scrutiny. At Compliance Mitigation we want to eliminate instances where people state that they did not know their decisions could result in victims – as government investigators view matters. Knowledge of consequences may result in people making fewer decisions that could make them vulnerable to 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 have also been 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 from the grand jury. Instead, the information will be presented 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, payments to friends and relatives, payment of consumer debts, and for work 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 alleged 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, 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 also 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. Tax fraud can be defined as knowingly or purposely giving false details to the IRS on your tax returns. Individuals who find themselves 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 also carries potentially serious penalties. Those who are found guilty of or who plead guilty to this offense may be fined a maximum of $250,000, sentenced to up to five years in prison or both. Furthermore, people convicted of tax evasion may also be ordered 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. Although he may have lived most of his life as an honorable person, the evidence suggests that he became greedy and got into financial trouble. Rather than responding to his troubles in an honorable way, he developed a scheme to take money he had no entitlement to and hid the transactions from his company.
Legislators pass laws to prevent people from stealing from their company. These laws will then be enforced by the federal government in order to punish those who commit these acts and to serve as a means to dissuade other law-abiding people from turning to crime.
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. He may choose to put the government to the test of 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, as a 60-year-old man, DiCrecchio could spend the rest of his life in federal prison.
With all of the evidence the government cited in the information, it would seem that prosecutors have a strong case. Like most defendants, DiCrecchio will likely 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 learned from the experience, and help the judge understand what steps he has taken to make things right.
As a result of this situation, two other small business owners now face a federal criminal investigation and three additional individuals could 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 robust 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 like tax fraud and embezzlement, they may be more inclined to make law-abiding decisions.
As a result of his criminal behavior, DiCrecchio faces a loss of liberty, loss of time spent with his family, and loss of financial resources. He faces a maximum sentence of 102 years in prison on the combined charges, a three-year period of supervised release, and a fine of $2,500,000.
DiCerrchio’s financial activities in this case study may match the actions of other business owners. Small business owners are oftentimes experts in their chosen field but are usually not also financial wizards, or feel that the government already takes enough in taxes. Small business owners could find themselves in the middle of a federal criminal investigation if they do not follow proper procedures and pay the correct amount of taxes due. Even though Dicrecchio seemingly acted with criminal intent, his behavior mirrors the behaviors of many people who have been convicted of white-collar crimes even though they did not intend to commit a crime.
- 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