Originally Syndicated on May 10, 2023 @ 11:20 am

Michael Stortini, 52, of Frank Robino Companies LLC admitted to diverting more than $600,000 from an employee 401(k) plan to pay for company expenses and failing to pay the Internal Revenue Service more than $450,000 in payroll taxes over a two-year period. Michael Stortini also took more than 900,000 from business accounts for his own use, according to federal authorities.

According to Assistant U.S. Attorney Shawn Weede, the company had financial problems in 2008.

Michael Stortini announced that the 401(k) plan will be terminated, but instead of returning assets to employees, he used them to pay business expenses. Weede stated that Michael Stortini also withdrew money from other corporate accounts and spent about $500,000 on gaming.

At sentencing on March 11, Michael Stortini now faces a maximum penalty of $1.2 million in fines and five years in jail on each offense.

Michael Stortini: A developer convicted of theft may face prison time.

A Wilmington development company co-owner has pleaded guilty to theft from an employee pension plan and deliberate refusal to pay taxes.

Michael Stortini, 52, of the Frank Robino Companies LLC, admitted diverting over $600,000 from an employee 401(k) plan to pay company expenditures and failing to pay over $450,000 in payroll taxes to the IRS for two years. According to federal authorities, Stortini also stole more than $900,000 from corporate accounts for personal use.

According to Assistant U.S. Attorney Shawn Weede, the corporation ran into financial difficulties in 2008.

Michael Stortini declared that the company’s 401(k) plan would be terminated, but instead of handing assets back to employees, he diverted funds to finance company expenses. Michael Stortini, according to Weede, also siphoned funds from other corporate accounts to himself, spending around $500,000 at casinos.

Michael Stortini now faces up to five years in prison and a $1.2 million fine during his March 11 sentencing.

Michael Stortini: Michael Stortini has been sentenced to 24 months in prison for stealing his employees’ retirement funds.

Michael Stortini, the former managing member and part-owner of the Frank Robino Companies (“FRC”), a Delaware real estate development firm, was sentenced yesterday to 24 months in prison by United States District Court Judge Richard G. Andrews for stealing $606,500 from his employees’ 401(k) plan and failing to pay hundreds of thousands of dollars in payroll taxes to the Internal Revenue Service (“IRS”).  In addition to the prison sentence, Judge Andrews ordered Michael Stortini to pay the IRS $638,468 in restitution and interest to the 401(k) plan participants.

Michael Stortini, a former managing member and part-owner of the Frank Robino Companies (“FRC”), a Delaware real estate development company, was sentenced to 24 months in prison yesterday by United States District Court Judge Richard G. Andrews for stealing $606,500 in retirement funds from his employees’ 401(k) plan and failing to pay hundreds of thousands of dollars in payroll taxes to the Internal Revenue Service (“IRS”).  In addition to the prison sentence, Judge Andrews ordered Michael Stortini to pay the IRS $638,468 in back taxes and restitution with interest to the 401(k) plan participants.

Judge Andrews stated that the two-year sentence was necessary to encourage adherence to the law and discourage others from engaging in similar trust-breaching activities.   When giving the sentence, Judge Andrews recalled a law school proverb: “When you have a fiduciary relationship for money like that, your money is white, and the money you control is black.”  When you combine the two, you’ll get black and white stripes on your clothes.

According to Akeia Conner, special agent in charge of IRS Criminal Investigation, it is a serious offense for corporations to violate their fiduciary commitments to their employees by putting money in their wallets that was designed to safeguard those employees’ futures. Michael Stortini’s activities damaged those who were financially connected to him, but they also harmed honest taxpayers who had to deal with the strain that Michael Stortini’s actions imposed on the tax system. Tax evasion has been wrongly represented as having no victims; however, this is false since when someone tries to avoid paying their taxes, everyone pays.

The prosecution was led by Shawn A. Weede, an associate US attorney.

Michael Stortini: What is Embezzlement?

Embezzlement is a type of white-collar crime in which a person or entity misappropriates assets entrusted to them on purpose. The embezzler obtains the funds legally and has the right to possess them in this sort of fraud, but the assets are then used for unwanted objectives.

Embezzlement is a violation of a person’s fiduciary responsibility.

• Embezzlement occurs when a person purposefully uses funds for a purpose other than the one intended.
• The embezzler is permitted to handle an asset in a specific manner but is not permitted to take it.
• Embezzlers may manufacture bills and receipts for non-existent activity and then use the money paid for personal purposes.
• Ponzi schemes are an example of fraud. Other examples include damaging personnel records and stealing company funds.
• Each year, businesses lose around $400 billion to theft.
• Embezzlers might face civil and criminal penalties for their actions.

What Exactly Is a White Collar Crime?

A white-collar crime is a non-violent crime perpetrated by a business expert who violated trust in order to earn financial gain. Fraud, theft, counterfeiting, embezzlement, money laundering, and other fraudulent activities are examples of white-collar crimes.

How does one prove Embezzlement?

To legally prove embezzlement, the claimant must show that the perpetrator had a fiduciary duty to the victim and that the embezzled asset was obtained through that relationship and knowingly communicated to the accused.

The key to detecting embezzlement is a transgression of trust or obligation. While this varies per state, the following four elements must be present:

• The two parties must have a fiduciary relationship. In other words, one party must rely on the other.
• The defendant must have acquired the property through that relationship
• The defendant’s actions must have been intentional and not accidental
• The defendant must have taken ownership of the property (at least temporarily), transferred ownership to someone else, or destroyed or hidden the property.

What Are the Penalties for Embezzlement?

For embezzling, a person can be held both civilly and criminally liable. The penalties vary from monetary fines and restitution to imprisonment.

Michael Stortini: Wrapping Up with How to Prevent Embezzlement?

Embezzlement begins with a breach of trust by a person entrusted with the authority to care for another’s property or money. One of the most reasonable initial measures a company can do is to carefully vet prospective workers. Aside from extensive background checks, examining character features through personality tests may identify unwanted habits.

Embezzlement begins with a breach of trust by a person entrusted with the authority to care for another’s property or money. One of the most reasonable initial measures a company can do is to carefully vet prospective workers. Aside from extensive background checks, examining character features through personality tests may identify unwanted habits.

Early detection helps to mitigate losses and protect the company’s reputation and the people it serves. Employers should make clear that they have a no-tolerance policy regarding illegal acts such as embezzling and communicate the consequences of such violations. Every company should promote a culture of honesty and fairness, encouraging its employees to remain vigilant and report instances of wrongdoing.