Acworth Executive Pleads Guilty to Defrauding His Former Company Through Kickback Scheme

ATLANTA—JOHN COSTA, 54, of Acworth, Georgia, pleaded guilty today in federal district court to a charge of conspiracy to commit wire fraud in connection with a scheme to defraud his former employer, “Interface, Inc.,” the largest modular carpet manufacturer in the United States.

United States Attorney Sally Quillian Yates said of the case, “This defendant took payoffs to steer business to a vendor of the company. This type of corruption hurts the honest operators of American businesses and their customers, as well as competing vendors who play by the rules. Our federal investigative agencies will continue to pursue cases involving those who pay, receive, or solicit kickbacks.”

According to United States Attorney Yates, the charges, and court documents: COSTA was employed as the president of a wholly owned subsidiary of Interface, and was responsible for overseeing sales, project management, and subcontracting of carpet installations for Interface customers. From April 2005 through September 2007, COSTA and the owner of a carpet installation company executed a scheme to defraud Interface that was designed to obtain money and property from Interface and deprive Interface of COSTA’s honest services. Specifically the evidence showed that COSTA awarded Interface installation work to that specific carpet installation company, and in exchange, COSTA was paid a percentage of the carpet installation company’s profits.

The scheme later expanded. COSTA directed his co-conspirator to pay COSTA’s spouse a salary, even though his spouse was not employed by and did not perform any work for the co-conspirator’s company. The evidence showed COSTA further directed his co-conspirator to pay for the credit card expenses of defendant COSTA’s spouse. The co-conspirator also made Individual Retirement Account (IRA) contributions in the name of COSTA’s spouse.

In the plea agreement in this case, COSTA agrees to pay restitution to Interface Inc. in the amount of $298,160.

Interface fully cooperated in the investigation of this case.

Sentencing is scheduled for December 9, 2011, at 9:30 a.m., before United States District Judge Richard W. Story.

This case is being investigated by special agents of the Federal Bureau of Investigation.

Assistant United States Attorney Glenn D. Baker is prosecuting the case.

For further information please contact Sally Q. Yates, United States Attorney, or Charysse L. Alexander, Executive Assistant United States Attorney, through Patrick Crosby, Public Affairs Officer, U.S. Attorney’s Office, at (404) 581-6016. The Internet address for the HomePage for the U.S. Attorney’s Office for the Northern District of Georgia is www.usdoj.gov/usao/gan.