CLEVELAND — The former vice president of Discovery Tours, Inc. has been charged on an eighteen-count federal indictment including wire fraud, money laundering, bank fraud, and making a false statement.
Joseph A. Cipolletti, 45, of Hudson, is accused of embezzling more than $600,000 over the course of four years for his own personal use, including buying vehicles and backyard renovations, according to U.S. Attorney Justin Herdman.
Discovery Tours, Inc., formerly located in Mayfield Village, was a company that offered educational trips for grade school and high school students to locations such as Chicago, Washington, D.C., New York City and more. The trips included transportation via coach buses, hotel accommodations, meals, sightseeing admissions and security.
Cipolletti, then vice president of the company, was responsible for managing the organization's finances, cash withdrawals, payroll and more.
Because of the embezzlement allegedly by Cipolletti, Discovery Tours abruptly ended its operations and filed for bankruptcy in May of 2018. Student trips to Washington, D.C. were canceled for dozens of schools across Ohio and more than 5,000 families lost the money they had previously paid for trip fees.
"As a result of the defendant's alleged actions, his place of business was forced into bankruptcy, and our community's schoolchildren were deprived of invaluable experiences and memories," Herdman stated.
Prosecutors also say that under oath in Bankruptcy Court, Cipolletti claimed that he did not owe his business any money, but he is accused of embezzling $609,942 from Discovery Tours and making false entries in the general ledger.
According to court documents, the embezzlement scheme lasted from June 2014 to May 2018. During that time, Cipolletti is alleged to have devised a scheme to divert payments intended for Discovery Tours trips for his personal use, defrauding parents and other student trip purchasers.
To keep the scheme going, Cipolletti allegedly made multiple false entries in the Discovery Tours general ledger claiming embezzled funds were trip-related expenses. He also is alleged to have forged an email to a hotel vendor claiming that the business suffered a loss of $236,022.27 due to a hacked account, paid vendors for previous student trips with deposits from future trips, and obtaining high-out interest loans to conceal his actions. The high interest on these loans ultimately led to Discovery Tours eventual bankruptcy filing.
“When these families paid for a trip, fraud wasn’t on the itinerary,” said Ohio Attorney General Dave Yost in a statement. “This business owner didn’t keep his word, so now his next destination will be the courthouse.”
“This individual is a typical con man,” said Cuyahoga County Prosecutor Michael O’Malley. “He took money from parents and never intended on fulfilling his obligations.”