Columbus, Ohio – John E. Kelly, 63, of Columbus, Ohio, pleaded guilty in U.S. District Court to one count each of mail fraud and tax evasion as part of a scheme to defraud his employers of approximately half a million dollars.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Angela L. Byers, Federal Bureau of Investigation (FBI), Cincinnati Division and Tommy D. Coke, Inspector in Charge, U.S. Postal Inspection Service, Pittsburgh Division, announced the plea offered before U.S. Magistrate Judge Norah McCann King.
According to the Statement of Facts, in 2014 and 2015, Kelly was employed at two different trucking logistics companies – CEVA Logistics and Container Port Group, Inc.
During that time, Kelly defrauded the two companies by causing them to pay for bogus advertising expenditures from a pair of sham companies that Kelly set up for his own gain.
Kelly billed the trucking companies more than half a million dollars for advertising services that were never actually provided. Instead, he took the payments and used them to pay personal expenses. He caused an actual loss of $461,000 from CEVA and CPG.
For example, Kelly served as CEVA’s director of recruiting and was able to set up new advertising vendors for payment. He instructed a direct-report employee to add a nominee company (that he controlled) to CEVA’s approved-vendor list. Kelly then began submitting bogus advertising invoices to CEVA from his company. From approximately March 2014 through March 2015, Kelly caused the submission of at least 65 invoices to CEVA totaling $485,670. CEVA paid out $438,030 of the invoices via checks, which were mailed to a Post Office Box that Kelley controlled in Lewis Center, Ohio.
Kelly was terminated from CEVA in April 2015 and then hired by CPG. He renamed his vendor company and began the scheme again, billing CPG for fake advertising services in the amount of $29,461. Nearly $23,000 was actually paid.
The defendant created email accounts and used fake identities as well as phony corporate registrations and Taxpayer/Employer Identification Numbers when corresponding with CEVA and CPG to conceal his involvement with the nominee companies.
Kelly also failed to file an individual or business tax return for 2014 and 2015. As a result, he had a tax due and owing (representing both his wages and embezzlement income) of at least $70,500 for each year.
Mail fraud is a federal crime punishable by up to 20 years in prison and tax evasion carries a potential maximum sentence of five years imprisonment.
The full press release is available at justice.gov.