PROVIDENCE, RI – A national sales executive for Dr. Pepper/Seven Up, Inc., a subsidiary of Dr. Pepper Snapple Group (Dr. Pepper), today pleaded guilty to charges that he submitted more than $1.7 million dollars worth of fraudulent invoices to Dr. Pepper through a promotions and marketing company he formed in his wife’s name.
Appearing in U.S. District Court in Providence, R.I., Michael Lynch, 52, of Newport, R.I., admitted to the Court that in April 2003, he incorporated Seacoast Unlimited Marketing and Promotions, LLC (Seacoast) in his wife’s name, and through Seacoast, from January 2007 until November 29, 2017, submitted to Dr. Pepper more than 200 fraudulent invoices totaling $1,716,949 for services such as promotional signs and banners, delivery of sample products to retail stores and the offering of discount prices to retail stores. None of the services billed to Dr. Pepper through Seacoast and paid for by Dr. Pepper were provided.
Lynch also admitted to the Court that he failed to declare any of the income he derived through Seacoast on the joint federal tax filings he filed with his wife. The tax loss applicable to the defendant’s conduct totals $386,320.
Michael Lynch’s guilty plea to wire fraud and filing a false tax return is announced by United States Attorney Stephen G. Dambruch, Special Agent in Charge of the FBI Boston Division Harold H. Shaw and Joel P. Garland, Special Agent in Charge, Internal Revenue Service Criminal Investigation.
Lynch is scheduled to be sentenced by United States District Court Chief Judge William E. Smith on June 1, 2018. Wire fraud is punishable by statutory penalties of up to 20 years imprisonment and a fine of $250,000. Filing a false tax return is punishable by statutory penalties of up to 3 years imprisonment and a $100,000 fine.
The matter, investigated by the FBI and IRS Criminal Investigation, is being prosecuted by Assistant U.S. Attorney Lee H. Vilker. .