Former Controller Of Non-Profit Organization That Funds Medical Research Pleads Guilty In Manhattan Federal Court To Embezzling Over $1.8 Million And Tax Evasion
Preet Bharara, the United States Attorney for the Southern District of New York, announced today that KAREN ALAMEDDINE, a/k/a “Karen Dean,” the former controller of a New York-based non-profit organization whose core mission is to cure genetic illnesses by supporting biomedical research (the “Non-Profit”), pled guilty in Manhattan federal court to embezzling more than $1.8 million from the Non-Profit, and to tax evasion for deliberately failing to report to the IRS as income the money she embezzled. ALAMEDDINE was initially charged in November 2014, and entered her guilty plea today before United States District Judge Gregory H. Woods.
Manhattan U.S. Attorney Preet Bharara said: “As she admitted in Court today, over the course of five years Karen Alameddine stole almost $2 million that she, as controller of an organization, was responsible for overseeing and safeguarding. To make matters worse, her victim was a non-profit organization dedicated to finding cures for serious diseases, and she compounded her embezzlement with tax crimes.”
According to the Complaint, the Indictment, and proceedings in Manhattan federal court:
From approximately late 2008 through early 2014, while working as the controller for the Non-Profit, ALAMEDDINE diverted over $1.85 million of the Non-Profit’s funds to her own bank accounts and for her own personal use. ALAMEDDINE executed the scheme principally by disguising QuickBooks entries to make transfers to her personal bank account appear as if they were transfers made to pay grant recipients of the Non-Profit. ALAMEDDINE further sought to disguise the fraud by inventing a fictitious accounting firm named “Davis & Greene,” purportedly based in Washington, D.C., which was, according to ALAMEDDINE, retained to prepare certain tax returns for the Non-Profit for the 2012 and 2013 tax years.
After ALAMEDDINE fraudulently transferred the funds from an account belonging to the Non-Profit to a personal bank account, she further transferred the funds to other accounts she controlled, and thereafter used those funds for various personal expenses, including to pay personal bills. Among the personal items ALAMEDDINE paid for with the embezzled money were utility bills, car payments, jewelry, the purchase of a recreational vehicle, her personal mortgages, and leisure travel.
In addition, for each of the calendar years 2009 through 2013, ALAMEDDINE filed tax returns with the Internal Revenue Service (“IRS”) in which she deliberately omitted reporting the income she received from the fraud. Those deliberate omissions resulted in ALAMEDDINE’s evasion of substantial amounts of income tax for each of the years between 2009 and 2013.
ALAMEDDINE, 57, of Perris, CA, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of tax evasion, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. ALAMEDDINE will be sentenced by Judge Woods on August 14, 2015, at 2:30 p.m.
Mr. Bharara praised the outstanding investigative work of the IRS and the U.S. Postal Inspection Service.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Stanley J. Okula is in charge of the prosecution.