A 15-count criminal indictment filed charging a Solon man with defrauding his former employer out of nearly $1.5 millio
The U.S. Attorney's office has charged a Solon man in a 15-count criminal indictment with defrauding his former employer out of nearly $1.5 million.
John A. Miller, 53, was charged with one count of conspiracy to commit mail fraud, nine counts of mail fraud, three counts of tax evasion and two counts of money laundering in connection with a scheme to defraud Parker Hannifin Corp.
This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations, in Cleveland, and is being handled by Assistant U.S. Attorney Christian H. Stickan.
The U.S. Attorney's office said Miller worked at Parker Hannifin Corp. for 25 years where he directed work to outside contractors. In 2002, he approached his neighbor, Nancy Seaman, to do IT work for PHC, according to the indictment.
To do this, Seaman established Digital Design Services, Inc., which she operated out of her residence in Solon. In 2004, Miller approached R.K. (not charged), who owned and operated a billing company in Pennsylvania which had previously been a subcontractor for PHC.
Miller requested that R.K. and his billing company prepare invoices and billings for PHC, and R.K. agreed to do so, according to the indictment.
Beginning around 2004, Miller engaged in a fraudulent scheme to increase the payment he was receiving from PHC by using subcontractors Seaman and R.K. to funnel payments to himself. He did his despite having a salaried position at PHC and without the knowledge or consent of PHC, according to the indictment.
Miller did this by falsely inflating the invoices submitted by Digital Design and Seaman and by asking R.K. to process payments and to pay subcontractors as designated by Miller. Under this arrangement, Miller submitted invoices in the names of Miller's wife and son, even though neither had done any of the work submitted in these invoices nor were they even aware that Miller was using their names to submit such billings to PHC, according to the indictment.
Miller caused a loss to PHC of approximately $1,489,494 between 2004 through 2011, according to the indictment.
Seaman was aware that additional amounts, over and above her Digital Design billings, were being sent to her.
Miller instructed Seaman to pay these additional funds to him in cash, less a 30 percent commission to Seaman, according to the indictment.
Seaman previously pleaded guilty in U.S. District Court to conspiring with Miller to conceal Miller's tax liability from the Internal Revenue Service and to conspiring with Miller to commit wire fraud in a scheme to defraud Parker Hannifin. She is awaiting sentencing.
Miller is also charged with money laundering for using the funds he stole from Parker Hannifin Corporation to pay his tax liabilities to the IRS and to pay for his son's tuition at Cornell University, according to the indictment.
Miller is also charged with tax evasion for calendar years 2009 to 2011. During the calendar year 2009, Miller received approximately $192,042 in taxable income, and owed approximately $30,568 in income tax; during the calendar year 2010, Miller received approximately $378,571 in taxable income, and owed approximately $93,745 in income tax; and during the calendar year 2011, Miller had received approximately $217,060 in taxable income, and owed approximately $43,488.00 in income tax, according to the indictment.
"This defendant is accused of running a scheme in which he stole nearly $1.5 million from his employer," said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. "This type of self-dealing is not fair to workers or shareholders and will not be tolerated."
Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation's Cleveland office, said: "Mr. Miller put a lot of effort into orchestrating and maintaining this seven year fraudulent scheme. Law enforcement will continue efforts to follow the money trial to ensure financial fraudsters are brought to justice."
"Fraud and embezzlement schemes harm everyone," said Kathy Enstrom, Special Agent in Charge, IRS Cincinnati Field Office. "As we often see, the victims are not only the taxpayers, but also the individuals and entities who suffer financial harm."