KY construction employees sentenced to 3-year prison term for $2M fraud scheme

Dive Brief:

  • Two former employees of a Louisville, KY, construction and engineering firm were sentenced to three years in prison for embezzling approximately $2 million from the company and stealing government funds, according to WHAS 11.
  • Prosecutors said Frank Burks Jr. and Pamela Duvall defrauded RAM Engineering and Construction by writing themselves unauthorized checks and exploiting Duvall's position as bookkeeper. The two also misstated a portion of Burks' income as nontaxable, which resulted in an overpayment from the Social Security Administration of more than $11,000.
  • Burks and Duvall reportedly carried out their scheme over a period of 13 years in order to pay for their own business undertakings and gambling habits.

Dive Insight:

While most employees who are entrusted with a company's financial operations are honest and trustworthy, some take advantage of that position. For example, last month, the former secretary-treasurer and business manager of a California construction workers' union pleaded guilty to embezzling almost $169,000 during a portion of his tenure there. Similar to the RAM employees, Edward Padilla allegedly wrote unapproved checks to himself and used union credit cards for personal expenses. He also gave himself unauthorized sick leave payments and travel advances.

Last September, two other construction industry-related embezzlement cases popped up, one in California and one in Kentucky. Prosecutors charged David Rubira, a former Santa Clarita, CA, city engineer, with keeping more than $533,000 in cash bond refunds meant for city contractors between November 2012 and April 2015.  Rubira pleaded not guilty in August 2016 but accepted a plea deal in November 2016 that left him with a four-year prison sentence.

Troy Sissom, an Indianapolis construction project manager, was also charged with embezzling funds from his employer last year. Prosecutors said he submitted fake invoices for almost $3 million on behalf of a company he formed but that did no work for Sissom's employer. His plea deal also included making restitution to the Internal Revenue Service in the amount of $381,000. He faced up to 20 years in prison but was sentenced to 41 months in prison last month. 

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Filed Under: Legal/Regulation
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