Former Manager of Castalia Farms Charged in Kickback Scheme
The former manager of Castalia Farms was charged this week for his role in a conspiracy in which he submitted false invoices to his employer in returns for kickbacks and other services from vendors, said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio, and Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office.
Michael K. Conrad, 48, of Castalia, Ohio, was charged with conspiracy and wire fraud via a criminal information.
Conrad managed Castalia Farms, a hospitality facility owned by Owens-Illinois, Inc. and used by the company as a recreational facility. In this capacity, Conrad sometimes had need for industrial equipment or auto repairs. He was a regular customer of an auto dealership where Robert A. Bellamy worked, and was a regular customer of Construction Equipment & Supply, a Sandusky company owned by a person identified as SCW, according to the information.
Beginning in 2001, Conrad engaged in a conspiracy to defraud Owens-Illinois by submitting false and fraudulent invoices, purportedly for services provided related to Castalia Farms. For example, Conrad and SCW submitted invoices to Owens-Illinois for equipment rentals that never occurred, or were far in excess of the time the equipment was rented, or purchase of construction supplies that never occurred, according to the information.
SCW made large sums of money through these fraudulent billings, and would repay Conrad with kickbacks, according to the information.
In another scheme, Conrad and Bellamy submitted false invoices to Owens-Illinois for vehicle repairs that never occurred, repairs to Conrad’s personal vehicles and auto parts never installed on vehicles owned by Owens-Illinois. Conrad received service and parts for his personal vehicles and those of his friends and family paid for by Owens-Illinois, according to the information.
Bellamy has pleaded guilty to his role in the conspiracy. The investigation is ongoing.
If convicted, the defendant’s sentence will be determined by the Court after reviewing factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The investigating agency in this case is the Federal Bureau of Investigation, Sandusky, Ohio, with the assistance of the Ohio Bureau of Criminal Investigation and the Erie County Sheriff’s Office. The case is being handled by Assistant United States Attorney Gene Crawford.
Any information is only a charge and is not evidence of guilt. Defendants are entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.