Ovid Timothy Hughes Gets Prison Sentence – Former Employee Steals From Company!

As a business ethics speaker, it is interesting to observe how many people believe that theft from their company is somehow O.K.! What’s even more interesting is the fact that, in most cases, they don’t think they’ll be caught.

It takes three things to create a fraud: (1) need; (2) opportunity and (3) rationalization. Seems that Ovid Timothy Hughes fell into the trap of theft for which there is always a consequence.

Ovid Timothy Hughes of Madison, Tennessee was sentenced to 12 months and a day in prison for committing mail fraud. (By the way, wire and mail fraud seem to be the issues that the government uses today to gain an easy conviction)

Hughes previously worked for a well-known computer company. Shortly after the company terminated his employment, Defendant came to possess certain account and credit-card information of the company’s customers. From November 2006 to September 2007, Defendant fraudulently used that account and credit-card information to purchase thousands of dollars worth of computer equipment and other items for his personal benefit. Defendant committed his crime by posing, over the internet and in e-mails, as a representative of the companies whose account information he obtained. He would then order merchandise and have it shipped to his apartment, but have the bill for that merchandise sent to the company’s real address with the intent that the company would pay the charges without realizing the fraud.

Hughes scheme was extensive: During an 11-month period, Defendant used at least nine different account or credit-card numbers, to place over 70 different orders, with approximately ten different merchants. In addition to computers, Defendant also ordered various types of high-end electronic equipment and designer clothing. To conceal his fraud, he assumed several different false identities, created e-mail accounts in the names of those false identities, and made up several fictional scenarios to make his orders appear legitimate when he communicated with merchants’ sales representatives. Ultimately, Defendant caused or attempted to cause over $78,000 in loss, an amount later offset by the approximately $25,000 worth of computer equipment that U.S. Secret Service agents were able to recover at Defendant’s apartment at the time of his arrest.

Judge Trauger found the length and extent of Defendant’s fraudulent conduct to merit a 12-month prison sentence. Defendant was also ordered to pay over $29,000 in restitution to the victims for the merchandise not recovered and to remain on supervised release for three years following his release from prison. As noted by the Court, Defendant’s conduct occurred over nearly a year’s time, involved several very intentional steps on his part, and compromised “inside” information of his former employer. Accordingly, the Court determined that a significant prison sentence was necessary to reflect the seriousness of the offense.

“So-called ‘white-collar’ crimes are just that – crimes. And the U.S. Attorney’s Office is committed to aggressively prosecuting such crimes whenever and wherever they occur in the Middle District of Tennessee,” said U.S. Attorney Edward Yarbrough. “This case is yet another example of how criminals use the anonymity of the internet and e-mail, along with false identities and deception, to commit frauds. But it also demonstrates the hard work and skill of the federal agents who combat those frauds. The U.S. Attorney’s Office will continue to fully support the law-enforcement agents and agencies who help protect innocent fraud victims and bring those who target them to justice.”

Every choice has a consequence. While Hughes will find that the cost of the choices he made is far greater than the short term benefit he received, the “un-named computer company” will likely change their internal controls so that it will be more difficult to gain sensitive information.

White collar and business ethics speaker, Chuck Gallagher, signing off…

2 Responses to Ovid Timothy Hughes Gets Prison Sentence – Former Employee Steals From Company!

  1. Did you read about A former Washington state legislator from the suburbs north of Seattle has been arrested on a federal mail fraud charge.

    “According to the U.S. attorney’s office, Paul H. King was indicted last month in an alleged scheme involving state unemployment compensation. The 58-year-old lawyer was arrested late Monday, appeared in court Tuesday and is being held at the Federal Detention Center in SeaTac pending a hearing on Thursday.

    He’s accused of mailing a false claim for jobless pay and receiving unemployment benefits as a result in late 2004 and early 2005. In June of 2005 he sent the state a check for $12,480 to refund those payments.

    King, most recently a lawyer in Seattle, lived in Mountlake Terrace and represented the 44th District as a Democrat in the Washington state House from 1983 to 1989.”


  2. O. Timothy Hughes says:

    Mr. Gallagher:

    I thought I’d contact you directly considering some of the comments you made in one of your your recent columns. I am the O. Timothy Hughes whom you wrote about in this article (https://chuckgallagher.wordpress.com/2008/05/19/ovid-timothy-hughes-gets-prison-sentence-former-employee-steals-from-company/); I thought I’d address a few factual discrepancies. First, while I recognize that you, Mr.Gallagher, are described as a “business ethics and fraud prevention expert”, as an expert, a consultant, and columnist I would expect a bit more due diligence as it relates to both subject research and journalistic impartiality. With all due respect, sir, if you are prepared to put an individuals name, life, and reputation on display for your own benefit, I would think it fair, at the very least, to make every attempt to get the full story. Secondly, while your
    conclusion – that “every decision has a consequence” – is true for me (I was prosecuted, convicted, and incarcerated for my crime), your statement assumes that former company shared absolutely no responsibility or culpability for my actions. The conclusion, essentially, is thus: The company and it’s clients were the unsuspecting victims and I was the “evil criminal mastermind” who maliciously took advantage of them. But by excluding reasonable mitigating circumstances – circumstances which you could have learned BEFORE taking your story to print by simply contacting me and giving me an opportunity to present my perspective – is journalistically irresponsible and unfair. So here are some additional facts – not excuses or rationalizations, but facts – which your article neglected to present.

    Consider this, Mr. Gallagher. I was fired from my job at “the well known computer company” along with nearly 500 other employees after having received three (3) merit-based sales promotions in less than 1 year, earning a designation as a Senior Sales Consultant. I was let go not for “employee malfeasance”, but because market forces dictated the need for lay-offs. After my termination, my co-workers and I were promised severance packages and continued health benefits – both of which were ultimately (and illegally) denied by the company. As a result a class action lawsuit is currently pending regarding their failure to pay rightful wages and employee benefits they promised and later refused to pay. Moreover, the company, throughout my period of employment, routinely forced me and my colleagues to work weekends, extended days, and unannounced overtime w/o pay; promoted unethical bait-and-switch tactics as legitimate sales procedures (as is
    indicated by a pending investigation by the Securities and Exchange Commission), and made unreasonable and, sometimes, unlawful demands on it’s employees on a regular basis. In addition to the illegal actions my former company engaged in after my termination, the information I received to commit my crime (the customer numbers, the credit card numbers, and account information) was all sent to me inadvertently by the company – a fact brought up at my trial and not contested by the U.S. Attorney. While my former employer refused to accept any responsibility for sending me the items used in the commission of my crime (probably because of the HUGE liability they would face by admitting any wrong-doing), they did not deny the possibility that I came to possess those records in precisely the same way I said. Admittedly, I was wrong for using this information the way that I did – but after being 1) unlawfully terminated from employment, 2) illegally denied
    rightful pay & health benefits for months w/o any recourse, and 3) witnessing unethical and illegal activity in the workplace as a regular part of doing legitimate business, how many people could reasonably be expected to “remain above the fray”? I’m not saying that my actions were defensible – but I’m not the Bennie Madoff-esque individual you describe in your article. Not innocent, sir. But not a sociopath who “believe[s] that theft from their company is somehow O.K.!” I demonstrated by virtue of my work ethic and the awards and promotions I received the, given the opportunity, I was capable of serving my company with absolute commitment – even excellence. But after doing so I was used-up, fired, and denied rightful benefits. Again, facts – not rationalizations and excuses.

    During the search of my residence and my ultimate arrest, officers needlessly damaged significant portions of my apartment – doors, cabinets, walls – which I later had to have repaired at my own expense. Also, nearly $30,000.00 worth of equipment was seized from my residence – some of which was my own personal property and had not acquired illegally – for which I was assessed a substantial fine. Some of the items seized were still in the original boxes – unopened – and could, essentially, be resold as new equipment. The items seized were, according to company sources, reported to the insurance company as “Total Lost/Damaged” by my former employer – though they were neither lost nor damaged. Also, as a result of the fine, I’m now responsible for paying my former company for items they seized from me, essentially allowing my former employer to receive three-times profit (items
    seized by the gov’t, covered by the insurance company, and paid for by a fine). I ask you, Mr. Gallagher, is it ethical or fair for a company to receive three-times profit for items recovered? Would it be fair if a private citizen received the same kind of arrangement? Again, I am not attempting to rationalize away responsibility for my actions, but the story presented in your article, sir, is at best one dimensional and, at worst, an incomplete and inaccurate farcical account of my case. My situation is far more complicated than ‘crime committed – conviction rendered – justice served.’

    In conclusion, Mr. Gallagher, recognize that while the people you write about in your articles are human beings… Flawed? Yes… Felons? Absolutely… But being convicted of a crime does not take away our
    value and worth as human beings. All human beings deserve at least the opportunity to live their lives, to expect the truth to be told about them and their stories, and to expect to be treated fairly and equitably. Occasionally, too, it would be reasonable to consider that our circumstances can’t be ascertained in short sound-bytes or from a press release posted on the DOJ website – http://www.usdoj.gov/usao/tnm/press_releases/2008/5_5_08.html. Just think about that the next time you decide to cast judgment on someone before actually doing the investigative research. Sometimes, even with convicted criminals, there is more to our stories than meets the eye…

    Thank you for your time and consideration. God Bless You!


    O. Timothy Hughes

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