Daily Court Reporter - News Transportation recruiter charged with defrauding employers out of half million dollars
Transportation recruiter charged with defrauding employers out of half million dollars
A federal grand jury has charged John E. Kelly, 62, of Columbus, with defrauding two employers out of approximately half a million dollars in an indictment returned here last week that was unsealed recently.
Kelly was arrested yesterday in North Carolina by federal agents and will be transported to Columbus for future court proceedings.
Benjamin C. Glassman, United States Attorney for the Southern District of Ohio, Ryan L. Korner, Special Agent in Charge, Internal Revenue Service (IRS), Criminal Investigation, Angela L. Byers, Federal Bureau of Investigation (FBI), Cincinnati Division and Christopher White, Assistant Inspector in Charge, U.S. Postal Inspection Service, announced the charges.
The indictment alleges that Kelly created and maintained a pair of sham business entities for the purpose of billing fake advertising invoices.
Beginning in February 2014, Kelly was employed as the Director of Driver Recruiting for CEVA Logistics, a supply chain company headquartered in Houston, Texas. The next year, he was employed in a similar role as Director of Fleet Recruitment for Container Port Group, Inc., headquartered in Cleveland. In both roles, Kelly was able to set up new advertising vendors for payment through his direct-report employees.
While employed at CEVA, Kelly allegedly had an employee add one of his fake businesses as an approved advertising vendor in CEVA’s accounting system. Kelly also allegedly created a fictitious alias – “Jess” – on behalf of the bogus advertising business.
“The indictment alleges that Kelly sent fraudulent advertising invoices from Jess’s email address to his own CEVA email address for advertising that did not exist,” U.S. Attorney Glassman said. “He’d then have CEVA mail the payment checks to a mailbox he established at a Pak Mail Store in Lewis Center.”
In total, Kelly allegedly created and submitted roughly 65 fraudulent advertising invoices to CEVA, tallying nearly $488,000.
Once employed at Container Port Group, it is alleged that Kelly continued the scheme by having an employee add a second sham business venture as an approved advertising vendor in the company’s accounting system.
He allegedly created a second alias – “Linda Rowe” – to communicate with himself and create fictitious advertising invoices.
Kelly allegedly created 13 false invoices through the scheme at Container Port Group and billed the business approximately $35,500. According to the indictment, he instructed his house cleaner to establish a pair of mailboxes on behalf of the second sham business at a UPS store in Delaware, Ohio.
Kelly also allegedly attempted to conceal his true and accurate income from the IRS in calendar years 2014 and 2015. It is calculated that Kelly owes more than $155,000 in taxes.
Kelly is charged with eight counts of mail fraud, eight counts of money laundering and two counts of tax evasion. Mail fraud is a crime punishable by up to 20 years in prison; money laundering carries a potential maximum sentence of 10 years in prison and tax evasion is a crime punishable by up to five years in prison.
“John Kelly held very important positions in businesses that placed their trust in him, and he allegedly abused their trust by creating fake business and lining his own pockets with stolen advertising dollars,” said Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office.
U.S. Attorney Glassman commended the investigation of this case by IRS Criminal Investigation, the FBI and USPIS, as well as Assistant United States Attorney Noah Litton, who is prosecuting the case.
An indictment merely contains allegations, and the defendant is presumed innocent unless proven guilty in a court of law.
Date Published: November 29, 2017