Accounts Payable Supervisor Who Embezzled Millions of Dollars Sentenced to Prison
For Further Information, Contact: Assistant U.S. Attorney Joseph J.M. Orabona (619)546-7951 or Assistant U.S. Attorney Aaron Arnzen (619)546-8384
NEWS RELEASE SUMMARY – April 7, 2017
SAN DIEGO – Former Accounts Payable Supervisor Edward Abellana was sentenced today in federal court to two years in prison for abusing his position of trust at Argen Corporation, a San Diego-based metals company, in order to steal millions of dollars which he used to fund a lavish lifestyle.
U.S. District Court Judge Janis L. Sammartino also ordered Abellana to repay approximately $1,952,202 to Argen and pay approximately $661,000 to the Internal Revenue Service for unpaid taxes on the money he embezzled from Argen.
According to his plea agreement, Abellana worked as the Accounts Payable Supervisor from December 2011 until October 2015. While overseeing the metals company’s credit card accounts, Abellana used his access (between June 2012 and October 2015) to embezzle approximately $1.9 million which he used for a variety of purchases, including renting private jets; paying for luxury vacations to Hawaii, Las Vegas, and Disneyland, and paying for a trip to the Super Bowl and other sporting events.
For example, Abellana admitted he charged more than $70,000 to charter a private jet to take him, his family and friends to Hawaii.
Abellana also used his position to defraud Argen by issuing unauthorized checks against the company’s checking account to pay for personal expenses. In total, Abellana admitted that he issued more than $162,000 in fraudulent checks.
As further provided in his plea agreement, Abellana was able to carry out the embezzlement by virtue of his access to the full range of financial records and accounts. On most occasions, Abellana would simply use the company’s credit cards to make personal purchases. In order to conceal his fraud, he intercepted the credit card statements and used computer software to alter the statements. Thereafter, he falsified the company’s books and records by falsely characterizing his personal purchases as legitimate business expenses.
In addition to his embezzlement scheme, Abellana filed false tax returns. He failed to report the money he embezzled on his tax returns for tax years 2012 through 2015. Abellana admitted that he owes the Internal Revenue Service more than $661,000 in federal income taxes.
“Edward Abellana took advantage of his trusted position at the company in order to wire millions of dollars for his own personal benefit,” said Acting U.S. Attorney Alana W. Robinson. “When a trusted employee uses federal wires to feed his own greed, he will be vigorously investigated and prosecuted for his crimes – not only for stealing the money, but also for failing to report the income and pay taxes.”
“For several years Edward Abellana abused his fiduciary responsibility as an Accounts Payable Supervisor,” said Eric S. Birnbaum, Special Agent in Charge of the FBI’s San Diego Division. “In doing so, he took advantage of his position of trust and defrauded his employer in order to live his lavish lifestyle. The FBI and other law enforcement agencies rely heavily on the trust and cooperation of members of the business industry and citizens to assist us in performing our mission. Through this cooperative effort, we are able to identify and hold those individuals accountable for criminal acts driven by their personal greed.”
“Individuals thinking about participating in embezzlement schemes should stop in their tracks and simply look at the consequences of taking the next step,” stated Special Agent in Charge R. Damon Rowe for IRS Criminal Investigation. “As Mr. Abellana learned today, those consequences include going to prison, being branded a convicted felon and paying back all the taxes owed plus steep penalties and interest on the unreported income.”
At the conclusion of today’s hearing, Abellana was ordered to self-surrender on June 2, 2017.
DEFENDANT Criminal Case No. 17CR0125-JLS
Edward K. Abellana Age: 40
SUMMARY OF CHARGES:
Count 1 – Wire Fraud (18 U.S.C. § 1343)
Maximum Penalties: maximum sentence of 20 years in prison; maximum fine of $250,000; maximum term of supervised release of 3 years
Count 2 – Making a False Tax Return (26 U.S.C. § 7206(1))
Maximum Penalties: maximum sentence of 3 years in prison; maximum fine of $250,000; maximum term of supervised release of 1 year
Federal Bureau of Investigation
Internal Revenue Service – Criminal Investigations