New Jersey Man Pleads Guilty To Participating In Multi-Million-Dollar Kickback Scheme To Defraud Williams Sonoma
For Immediate Release
U.S. Attorney's Office, Northern District of California
Defendant Admits to Paying Over $12 Million in Kickbacks to Obtain Warehouse Logistics Business
SAN FRANCISCO – Michael Podhurst pleaded guilty in federal court today to charges related to his role in a multi-million-dollar fraudulent kickback scheme, announced United States Attorney Ismail J. Ramsey and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge Darren Lian. The guilty plea was accepted by the Hon. Richard Seeborg, U.S. District Judge.
In his plea agreement, Podhurst, 62, of Monroe Township, New Jersey, admitted he conspired with a co-defendant, a former executive at Williams Sonoma, Inc. (WSI), to defraud WSI by paying kickbacks to a shell company controlled by the co-defendant. In the agreement Podhurst admitted that he paid kickbacks in exchange for his co-defendant directing WSI business to three warehouse logistics companies where Podhurst held executive positions and ownership interests. Per Podhurst’s plea agreement, the kickbacks were concealed from WSI. WSI is a home-goods retailer headquartered in San Francisco that operates brands such as Williams Sonoma, Pottery Barn, and West Elm.
As alleged in the indictment and admitted to in the plea agreement, between approximately October 2018 and July 2022, Podhurst worked for three companies that provided WSI warehouses with forklifts, warehouse racking systems, and machinery. WSI used these warehouses to store and distribute WSI goods around the United States. Using his position and interest within the companies where he worked, Podhurst caused his companies to pay his co-defendant kickbacks in exchange for his co-defendant causing WSI to award and sign contracts with and make payments to the companies affiliated with Podhurst. During a four-year period, Podhurst directed the three companies where he worked to pay more than $12 million in kickbacks to a shell company owned and controlled by his co-defendant.
Podhurst was indicted by a federal Grand Jury on April 11, 2023. He was charged with one count of wire fraud and honest services wire fraud conspiracy, in violation of 18 U.S.C. § 1349; six counts of wire fraud and honest services wire fraud, in violation of 18 U.S.C. §§ 1343 and 1346; and one count of money laundering conspiracy, in violation of 18 U.S.C § 1956(h). Under the plea agreement, Podhurst pleaded guilty to the wire fraud conspiracy and the money laundering conspiracy counts. If Podhurst complies with his plea agreement, the remaining counts will be dismissed at sentencing.
Podhurst is currently released on bond. His next scheduled appearance is November 14, 2023. Podhurst faces a statutory maximum of 20 years in prison for each of the wire fraud conspiracy and money laundering conspiracy counts, as well as a $250,000 fine for the wire fraud conspiracy count and a $500,000 fine for the money laundering conspiracy count. As part of any sentence the court also may order Podhurst to serve an additional term of supervised release and to pay restitution, if appropriate. However, any sentence will be imposed by the court only after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
On May 30, 2023, co-defendant Kourosh Mirmedhi pleaded guilty to wire fraud and money laundering conspiracy charges. Charges against two of Podhurst’s co-defendants remain pending.
The case is being prosecuted by the Corporate and Securities Fraud Section of the U.S. Attorney’s Office for the Northern District of California, and Assistant U.S. Attorneys Ross Weingarten and Christiaan Highsmith are prosecuting the case with the assistance of Elizabeth Kim. The prosecution is the result of an investigation by the IRS-CI.
Updated June 12, 2023