Two sentenced for defrauding tDS Telecom of $2.5 Million
T Madison, Wis. - John W. Vaudreuil, United States Attorney for the Western District of Wisconsin, announced that Andrew G. Mahaffy, Sr., 65, Murrells Inlet, S.C., and Timothy P. Furness, 48, Rochester, N.Y., were sentenced today in U.S. District Court in Madison to 51 months and 18 months, respectively.
Mahaffy and Furness previously pleaded guilty to committing mail fraud and obtaining approximately $2.5 million from TDS Telecom. Mahaffy was ordered to report to federal prison on April 13; Furness was ordered to report on May 15, 2012.
Andrew Mahaffy, Sr. was employed by TDS Telecom as a project implementation manager from 1998 until he retired in December 2009. He managed construction projects for TDS in various eastern and southern states. He also had authority to seek work from outside vendors and authorize the payment of invoices from the vendors. Timothy Furness owned a company that was a sales representative for telecommunication equipment.
From April 1998 through January 7, 2010, Mahaffy and Furness operated a false invoice/false billing mail fraud scheme targeting TDS Telecom in Middleton. Mahaffy provided instructions to Furness for creating false invoices, and directions on how the money should be split between them after TDS paid the false invoices. Furness then created these false invoices and provided them to TDS, where they were approved by Mahaffy.
After the money was paid by TDS to Furness, pursuant to Mahaffy's earlier directions, Furness split the money received pursuant to the bogus invoice and provided approximately one-half to Mahaffy. During the scheme, Furness and Mahaffy created, submitted, and approved approximately 327 false invoices and TDS paid approximately $2.5 million.
In addition to sentencing both defendants to prison, U.S. District Judge Barbara B. Crabb ordered them to pay $2,493,756.10 in restitution.
United States Attorney Vaudreuil stated that today's sentencing was the result of an investigation conducted by the United States Postal Inspection Service.
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