Rochester Man Pleads Guilty to Fraud and Money Laundering Conspiracies
|U.S. Attorney’s Office May 13, 2013|
ROCHESTER, NY—U.S. Attorney William J. Hochul, Jr. announced today that Kenneth M. Griffin, 45, of Rochester, New York, pleaded guilty before U.S. District Judge Frank P. Geraci to conspiring to commit mail and wire fraud and conspiring to engage in money laundering activities. The charges carry a maximum penalty of 20 years in prison, a fine of $500,000, or both.
Assistant U.S. Attorney John J. Field, who is handling the case, stated that the defendant owned and controlled an employment staffing business that he operated under various names, including LHT USA Inc. and Cambridge Personnel Inc. From August 2007 to June 2008, Griffin conspired with others to commit mail and wire fraud and also to launder their ill-gotten gains, which totaled more than $500,000. Among other things, the fraud involved creating false invoices and other supporting documents that the defendant then sold to a series of financing companies on a weekly basis for immediate cash. When a financing company realized that it had been sold uncollectible invoices and stopped dealing with Griffin’s business, the defendant would change business names and continue the scheme with another financing company.
For example, on April 15, 2008, $19,000 worth of false invoices were issued for Griffin’s business, Cambridge Personnel. The invoices claimed that the defendant had provided services to various customers which he had not. Griffin then sold these false invoices to New Century Financial, the third and final victim of his scheme.
To conceal his involvement in the conspiracy, Griffin created corporations such as LHT USA and Cambridge Personnel and put those corporations in the names of nominee owners. The defendant further concealed his involvement by laundering the proceeds of the fraud by using the services of a debit card company known as Comdata Corporation. Griffin and his co-conspirators created and used an account at Comdata to receive the proceeds of their fraud and to conceal their ownership and control over these proceeds. They concealed their control and ownership over the fraudulently obtained money by transferring the funds on to Comdata debit cards, which are anonymous on their face. Griffin then provided these anonymous Comdata cards to lower-level employees with directions to go to ATMs around the Rochester area to withdraw cash and then return the cash to defendant.
“This case is another example of why it is so important for all to know who they are doing business with,” said U.S. Attorney Hochul. “Fraud costs American businesses and individuals literally billions of dollars each and every year. While this office will continue to vigorously investigate and prosecute fraud wherever it occurs, still the best defense is for our citizens to guard against letting it happen in the first place. For more information on how to protect yourself, visit the www.stopfraud.gov website or contact our office day or night.”
The plea is the culmination of an investigation on the part of special agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Special Agent in Charge Toni M. Weirauch, and special agents of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel.
Sentencing is scheduled for August 28 at 9:30 a.m. before Judge Geraci.