Former President of Maryland Lawn and Garden Supply Company Pleads Guilty to Diverting More Than $187,000 in Company Funds
BALTIMORE, MD—Malcomb C. Cork, age 55, of South Carolina, pleaded guilty today to causing more than $187,000 to be diverted from his employer’s bank account.
The guilty plea was announced by United States Attorney for the District of Maryland Rod J. Rosenstein and Special Agent in Charge Kevin Perkins of the Federal Bureau of Investigation.
According to his plea agreement, from 2004 until mid-2012, Cork was the President of a Maryland company that distributed lawn and garden supplies. Under the terms of his contract with the company, Cork also was permitted to operate a business he established called Medical Solutions, Inc. (MSI). MSI executed a licensing agreement with Chemence LLC, a company that manufactured and distributed products, including a medical grade adhesive. Under the agreement, MSI was required to pay Chemence $187,500 by July 1, 2011. On that date, Cork wrote a check to Chemence for $187,500 drawn on his investment account, which was returned due to insufficient funds.
Cork admitted that on July 15, 2011, he directed subordinates to transfer $187,500 from the lawn and garden supply company’s operating account to an account in the name of Chemence LLC. When the Chief Financial Officer (CFO) for the company, who was on vacation at the time of the funds transfer, returned and asked about the expenditure, Cork told the CFO that the funds were transferred to a trade show vendor with which the company was doing business. Cork advised the CFO that he would obtain an invoice in support of the money transfer. Despite repeated requests from the CFO, Cork never supplied an invoice to support the charge. Eventually the company discovered that the payment was unrelated to its business and attempted—unsuccessfully—to recover the money. Cork admitted that he knew he was not authorized to direct the funds transfer, but did so anyway for his own benefit.
Cork and the government have agreed that if the Court accepts the plea agreement Cork will be sentenced to no more than 15 months in prison. Chief U.S. District Judge Catherine C. Blake has scheduled his sentencing for February 29, 2016, at 9:00 a.m.
Today’s announcement is part of the efforts undertaken in connection with the President’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions and other organizations. Since fiscal year 2009, the Justice Department has filed over 18,000 financial fraud cases against more than 25,000 defendants. For more information on the task force, please visitwww.StopFraud.gov.
United States Attorney Rod J. Rosenstein commended the FBI for its work in the investigation. Mr. Rosenstein thanked Assistant U.S. Attorneys P. Michael Cunningham and Aaron S. J. Zelinsky, who are prosecuting the case.