BOSTON – The former Director of Technical and Development Operations at a South Boston-based media technology company was sentenced today for a fraud scheme in which he stole almost a million dollars’ worth of iPads and other Apple products from his employer.
Michael S. Denning, 34, of Peabody, was sentenced by U.S. District Court Judge F. Dennis Saylor IV to 78 months in prison, three years of supervised release and ordered to pay restitution of $1,391,618. In January 2015, Denning pleaded guilty to one count of mail fraud and one count of filing false tax returns. After Denning was charged with the crime, he went on to commit a similar crime at a different company.
In late 2010, Denning began working at a South Boston-based media technology company. Denning’s job responsibilities included purchasing computer equipment, software, and other technology-based products for use by company employees. Shortly after he was hired, Denning began ordering extra Apple computer equipment, primarily iPads, from a wholesale computer vendor used by the company. Denning then intercepted these packages and sold them for cash, initially on eBay and Craigslist and later to eBay resellers. Denning generated and submitted fraudulent invoices so that the company would pay the wholesale vendor. Denning would change the description on the invoices so that they would appear to be for other items that he had legitimately purchased, such as software licenses, toner cartridges, computer monitors and other items. He also took measures to conceal the fraud with the wholesale vendor, for instance by falsely noting that the iPads ordered were for “new hires.” By the end of 2013, Denning, who was promoted to Director of Technical and Development Operations, had ordered almost a million dollars of Apple computer equipment in this manner. Only a handful of these products were legitimate purchases for employees. Denning also filed income tax returns that falsely listed his salary as his only source of income.
While Denning was negotiating a plea to the above charges, he began working for a new employer, and again developed a scheme involving creating false invoices. By the time the scheme was uncovered, Denning had stolen $380,000. The judge noted that he had considered the additional fraud in imposing the sentence of 78 months.
United States Attorney Carmen M. Ortiz; James V. Buthorn, Acting Special Agent in Charge of the United States Postal Service; and William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigations in Boston, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Amy Harman Burkart of Ortiz’s Cybercrime Unit.