BARNSTABLE MAN PLEADS GUILTY TO $1 MILLION FRAUD
BOSTON, Mass. - A Barnstable man was convicted today in federal court of having defrauded a Massachusetts company of more than $1 million and filing a false tax return.
STANLEY WHEELER, 70, of Barnstable, pleaded guilty before U.S. District Judge Joseph L. Tauro to three counts of mail fraud and one count of filing a false tax return, all in connection with a scheme to defraud a Massachusetts company by paying kickbacks to a now-former employee and submitting fraudulent invoices for services never provided.
At today’s plea hearing, the prosecutor told the Court that had the case proceeded to trial the Government’s evidence would have proven that Wheeler owned and operated a Boston business called Wheeler Sales Associates d/b/a Wheeler Packaging Associates (“WPA”) and his co-defendant James Repetto was an Operations Manager and Plant Manager for the victim company. According to the prosecutor, the two began a scheme in about 1999 in which WPA provided bin and pallet repair services to the company and Repetto received a kickback payment for every invoice paid for such services. Soon after, the two began submitting invoices to the victim company for services not actually provided, with Repetto approving the invoices for payment. Wheeler and Repetto then split the entire amount paid, with Repetto receiving a third in cash, Wheeler keeping a third, and the remaining third intended to pay WPA’s taxes on the income. The prosecutor asserted that from about 2003 until Repetto left his position at the company in 2008, Repetto himself prepared and submitted all the WPA invoices, using a form he kept on a thumb drive, and that all the invoices submitted during that period were fraudulent. The government alleges that the scheme netted the two about $1.3 million in payments based on fraudulent invoices. Wheeler also pleaded guilty to filing a false tax return which falsely claimed a business deduction for the kickback payments made to Repetto.
Judge Tauro scheduled Wheeler’s sentencing for January 19, 2011. Wheeler faces up to 20 years imprisonment, to be followed by 3 years of supervised release and a $250,000 fine on each of the three mail fraud counts, and up to 3 years imprisonment, to be followed by one year of supervised release and a $250,000 fine on the false tax return count.
United States Attorney Carmen M. Ortiz, William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations - Boston Field Office and Robert Bethel, Inspector in Charge of the U.S. Postal Inspection Service announced the plea today.
The case is being prosecuted by Assistant U.S. Attorney Mark J. Balthazard of Ortiz’s Economic Crimes Unit.