Fake invoices from a nonexistent company, failing to file income tax returns and bankruptcy fraud, earn Ronald Lupica, age 63, 15 months in federal prison including his agreement to repay $1.4 million of fraudulent receipts.
According to the US Attorney’s office in the District of Connecticut:
Kevin J. O’Connor, United States Attorney for the District of Connecticut, announced that RONALD A. LUPICA, 63, of Norwalk, Connecticut, was sentenced today by Senior United States District Judge Alan H. Nevas in Bridgeport to 15 months of imprisonment, followed by three years of supervised release. On July 26, 2007, LUPICA pleaded guilty to charges of bankruptcy fraud, evading the payment of federal income taxes, and mail fraud.
According to documents filed with the Court and statements made in court, LUPICA, and Daniel Arciola, an employee of Advanced Recycling Corporation (“ARC”), diverted waste paper from ARC for delivery to paper mills for recycling. From approximately mid-1999 to August 2002, LUPICA and Arciola would issue invoices to mills from Empire Trucking with the understanding that it was a subsidiary of ARC. Empire Trucking, was a nonexistent trucking company over which LUPICA had sole control. The mills would then mail checks to Empire Trucking as payments for the waste paper. The receipts of this fraud totaled approximately $1,400,000.
With respect to the tax evasion offense, LUPICA received taxable income of approximately $323,727 from Empire Trucking in 2000 and owed $104,1241 in federal taxes. However, in order to conceal his receipt of this income, LUPICA failed to file a tax return for the 2000 tax year, failed to pay to the Internal Revenue Service the federal taxes owed, and deposited funds received for diverted recycled materials into the bank accounts of Empire Trucking.
Also, in November 2000, LUPICA intended to defeat a federal bankruptcy by receiving approximately $1700 in payments on a $168,000 debt from a debtor who had filed for bankruptcy the U.S. Bankruptcy Court in Connecticut.
LUPICA has agreed to repay Advance Recycling Corporation $1,400,000 and, to the U.S. Treasury, back taxes for the 1999 through 2002 tax years.
Arciola pleaded guilty to tax evasion and, on December 18, 2007, he was sentenced to 12 months and one day of imprisonment.
Just another example of the statement I make as a business ethics speaker, Every Choice Has A Consequence. Regardless of the choice – what ever we do, there is a consequence that follows. It takes three components to achieve a fraud: (1) need, (2) opportunity, and (3) rationalization. To avoid frauds like the one shown above taking place there needs to be controls (both internal and external) in place to remove one or more of the keys to a “successful” fraud taking place.
While I certainly can’t speak for Lupia, I know, in my case, I didn’t start out with the intent to make choices that would land me in federal prison. However, just like the perfect storm, the three elements of a fraud were present and I bit. That first bite was all that was needed to create a string of negative consequences that were impactful.
Today, as a Senior Sales Executive in a public company and business ethics speaker, (See Demo Video on YouTube) I speak to groups nationwide about the effects of choices and consequences. Perhaps during his time in prison, Mr. O’Connor will reflect on his choices and use his time to help others see the wisdom and logic of not following in his footsteps!