Former Chief Technology Officer Pleads Guilty
To Embezzling More Than $150,000 From Non-Profit
Used Money For Laptop, Jewelry, Cable Bills, and Other Personal Expenses
WASHINGTON – Paul F. Kaufman, 55, of Stafford, Va., pled guilty today to a federal charge stemming from his embezzlement of more than $150,000 from his former employer, a non-profit based in Washington, D.C., U.S. Attorney Ronald C. Machen Jr. announced.
Kaufman pled guilty in the U.S. District Court for the District of Columbia to a charge of theft concerning a program receiving federal funds. He is to be sentenced May 8, 2014 by the Honorable Ketanji Brown Jackson. Under federal sentencing guidelines, Kaufman faces a potential prison term of up to 30 months in prison and financial penalties. As part of his plea agreement, Kaufman has agreed to pay restitution and a forfeiture money judgment.
According to the government’s evidence, Kaufman oversaw and managed the technology department for a non-profit identified in court documents as “Non-Profit A,” an organization that received federal money. Kaufman was authorized to solicit and approve work from outside vendors and he had the authority to direct the accounting department to pay them. He also had the authority to make business-related charges on certain corporate credit cards.
Without the knowledge of “Non-Profit A,” Kaufman formed two companies. He then submitted invoices from these companies to the non-profit and authorized payments. All told, Kaufman generated $110,925 from this scheme between January 2004 and March 2012.
In addition, the government’s evidence showed, Kaufman embezzled at least $46,590 from the non-profit by using its corporate credit cards and accounting department to pay a variety of personal expenses. Among other things, the unauthorized personal charges included expenses for Kaufman’s home cable and Internet service, food, coffee, gas, parking, music downloads, and a personal laptop computer. At one point, in April 2012, a non-profit employee discovered that Kaufman had used a corporate credit card to charge about $288 at a jewelry store. When asked about the charge, Kaufman produced an altered receipt and falsely claimed that the invoice was for repairs to an employee’s iPhone.
Kaufman was terminated by the non-profit on May 4, 2012. Two days later, he sent an e-mail to the non-profit’s president and chief executive officer, apologizing for his actions and asking that he be allowed to reimburse the organization for the money that he embezzled.
The amount of restitution and forfeiture will be set by the Court. Kaufman contends that the total loss should be offset by the fair market value of work that he purportedly performed, and that the total he owes should be between $70,001 and $157,516.
In announcing the plea, U.S. Attorney Machen commended the work of the Metropolitan Police Department (MPD), which investigated the case. He also acknowledged the efforts of those who worked on the case from the U.S. Attorney’s Office, including Assistant U.S. Attorney Catherine K. Connelly, who is assisting with forfeiture issues. Finally, he commended Assistant U.S. Attorney Ephraim (Fry) Wernick, who is prosecuting the case.