PROVIDENCE, RI – A national sales executive for Dr.
Pepper/Seven Up, Inc., a subsidiary of Dr. Pepper Snapple Group (Dr. Pepper),
was sentenced Friday to 33 months in federal prison for submitting more than
$1.7 million dollars worth of fraudulent invoices to Dr. Pepper through a
promotions and marketing company he formed in his wife’s name.
In February, Michael Lynch, 53, of Newport, R.I., admitted
to the Court that in April 2003, he incorporated Seacoast Unlimited Marketing
and Promotions, LLC (Seacoast) in his wife’s name, and through Seacoast, from
January 2007 until November 29, 2017, submitted to Dr. Pepper more than 200
fraudulent invoices totaling $1,716,949 for services such as promotional signs
and banners, delivery of sample products to retail stores and the offering of
discount prices to retail stores. None of the services billed to and paid for
by Dr. Pepper were provided.
Additionally, Lynch admitted that he failed to declare any
of the income he derived through Seacoast on the joint federal tax filings he
filed with his wife. The tax loss applicable to the defendant’s conduct totals
$386,320.
Lynch pleaded guilty on February 27, 2018, to wire fraud and
filing a false tax return.
At sentencing, U.S. District Court Chief Judge William E.
Smith also ordered Lynch to serve 2 years supervised release upon completion of
his term of incarceration, to pay full restitution to Dr. Pepper, and to pay
taxes owed to the Internal Revenue Service.
The U.S. Sentencing Guidelines range of imprisonment in this
matter is 33 – 41 months. The government recommended the court impose a
sentence of 33 months incarceration. Lynch’s sentence is announced by United
States Attorney Stephen G. Dambruch, Special Agent in Charge of the FBI Boston
Division Harold H. Shaw, and Special Agent in Charge of Internal Revenue
Service Criminal Investigation Kristina O'Connell.
The matter, investigated by the FBI and by IRS Criminal
Investigation, was prosecuted by Assistant U.S. Attorney Lee H. Vilker.
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