Fraudster Sentenced to Five Years in Federal Prison for Defrauding Employers of Nearly $5 Million

Fraudster Sentenced to Five Years in Federal Prison for Defrauding Employers of Nearly $5 Million

Fraudster Sentenced to Five Years in Federal Prison for Defrauding Employers of Nearly $5 Million

U.S. Attorney’s Office, District of Maryland
29 April 2019

FOR IMMEDIATE RELEASE

Peterson Received Commissions and Bonuses for Non-existent Work He Created Through Fake Contracts

Baltimore, Maryland – U.S. District Judge Catherine C. Blake sentenced Michael Peterson, age 48, of Alpharetta, Georgia, on April 26, 2019, to five years in federal prison, followed by three years of supervised release, after Peterson pleaded guilty to wire fraud in connection with a scheme to defraud four employers, including an employer in Maryland, of a total of almost $5 million. Judge Blake entered an order requiring Peterson to pay restitution of approximately $3.9 million.

The guilty plea and sentence were announced by United States Attorney for the District of Maryland Robert K. Hur and Acting Special Agent in Charge Jennifer L. Moore of the Federal Bureau of Investigation, Baltimore Field Office.

According to Peterson’s plea agreement, from March 2014 through March 2018, Peterson defrauded several employers by obtaining pay for non-existent contracts that he falsely claimed to have obtained or was in the process of obtaining from various entities. While employed at each of the companies he defrauded, Peterson occupied a position of trust as an executive salesperson within the company.

Specifically, Peterson created fake e-mail accounts and identities, which he falsely represented to his employers were officials at companies with which he claimed to have obtained contracts. Peterson created and signed false documents, sent e-mails to himself and co-workers purportedly from those officials, in an effort to conceal his fraud. All the while, Peterson admitted that he collected salaries ranging from $115,000 to $150,000 per year, commissions, loans, travel reimbursements, and other benefits from his employers. Eventually, each of Peterson’s employers became suspicious, uncovered the fraud, and then terminated Peterson’s employment.

For example, from February 2015 to October 2016, Peterson worked remotely from his residence in Georgia, first as Vice President for Business Development and then as Vice President of Sales at Company B, headquartered in Glenwood, Maryland. Company B provided health care services for various entities. From March 2015 until September 2016, Peterson deceived Company B employees into believing that they were conducting business with employees from Mitas Tires North America, Inc, or persons authorized to represent Mitas in connection with a multi-million dollar contract. Company B undertook various steps to implement the alleged contract with Mitas, including hiring an additional 11 employees to work on matters related to the contract. Over the course of the next year, Peterson continued to deceive Company B employees into believing that the Mitas contract was progressing towards implementation, including by having co-conspirators pose as officials at Mitas. Between April and July 2016, Peterson’s supervisor tried repeatedly by telephone and e-mail to arrange an in-person meeting with alleged Mitas employees, but each time the meeting was postponed or cancelled at the last minute. Eventually, the supervisor became so suspicious that he drove to the location in New Jersey that he understood to be the Mitas headquarters, but there was no Mitas facility at that location. Company B undertook an internal investigation into Peterson’s conduct, including the Mitas contract and two other contracts Peterson had obtained. Company B determined that neither Mitas nor the other two companies had ever contracted with, or had any association with Company B, and that Peterson had presented fraudulent contracts. Company B terminated Peterson’s employment in October 2016.

United States Attorney Robert K. Hur praised the FBI for its work in the investigation. Mr. Hur thanked Assistant U.S. Attorney Kathleen O. Gavin, who prosecuted the case.

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Contact:
Marcia Murphy
(410) 209-4854