The FBI arrested Gomidas Garabed Hartounian in his home on November 25th. Hartounian is the former CFO of a company based in Englewood, New Jersey. He has been charged with embezzling $6.3 million, taken from his former place of work with a single count of wire fraud.
Hartounian was once CFO of the undisclosed Englewood company, and worked there for 7 years. During that time, he registered a company to his residential address under the name of MGB LLC. He is accused of listing MGB as one of the vendors of the Englewood company’s accounting system, as well as of routing company money to MGB through forged checks. Harco Industries Inc. lists Hartounian on its Facebook page, possibly confirming the Englewood company for which he worked.
US Attorney Paul J. Fishman said, “Because Hartounian didn’t have sole signatory power, he forged the signatures of the chief executive officer or the chief operating officer before depositing the checks into bank accounts that he controlled.” The money Hartounian allegedly took was used to for a number of personal expenses, such as mortgage payments, credit card bills, and taxes for real estate.
If convicted, he will face up to 20 years of incarceration. Accounting embezzlement, such as this, is one of the more common forms of the crime. The prosecution will have to prove:
- The financial relationship between Hartounian and his former company;
- The dishonest acquisition of funds through the relationship;
- The ownership of the stolen funds/property by Hartounian; and
- That Hartounian did so intentionally
Hartounian holds dual citizenship in the US and Armenia. He has been ordered to hand over his passport for the duration of the case. Bail has been set at $500,000 by a federal judge. Hartounian was released, but will wear a monitor until December 2, his deadline to secure the bail amount. He is being represented by Douglas Stevinson, a partner at Windels Marx Lane & Mittendorf LLP.
According to the Association of Certified Fraud Examiners (ACFE), fraud accounts for 5% of all revenue lost in privately held companies. Furthermore, 22% of fraud cases involve losses of $1 million or more.