Former COO of local tech support firm sentenced to 24 months in seven-year fraud scheme | USAO-SDCA
SAN DIEGO — Matthew P. Hernandez, a former director of a small San Diego-based technology support company, was sentenced today in federal court to 24 months in custody for embezzling more than $350,000. Hernandez was also ordered to pay $356,664.46 in restitution to the company.
Hernandez pleaded guilty on August 24, 2021 to four counts of wire fraud. According to the government’s plea agreement and sentencing memorandum, Hernandez was responsible for handling payroll, accounts payable and paying bonuses to company employees. Hernandez had unlimited access to company books and records and the authority to sign checks in the company’s name. In his leadership role, Hernandez flew hundreds of times from the firm over seven years, from 2010 to January 2017.
Hernandez robbed the company in four different ways. First, Hernandez issued checks and made online payments from the company’s checking account directly to his USAA account to pay off personal credit card debt. Second, Hernandez used the company credit card to make unauthorized and unprofessional purchases. For example, Hernandez used the company credit card to buy a $3,500 hot tub, a home gym, a set of knives, a TAG Heuer running watch, round-trip flights between Los Angeles and the Dominican Republic and Coachella concert tickets. Third, Hernandez issued himself multiple paychecks for a single pay period. And fourth, Hernandez issued checks from the company checking account directly to his personal bank account.
To cover up his fraudulent conduct, Hernandez falsified the company’s books to make the fraudulent payments look legitimate. To do this, Hernandez changed the payee entries in the company’s books from his personal accounts to the companies the company did business with. When faced with discrepancies in the company’s books or questions about the USAA account, Hernandez lied to make it seem like he would balance the books and reimburse the company for any unauthorized funds. that would have been paid to him, and that the USAA account belonged to a company with which the company did business.
The fraudulent conduct was first discovered in January 2017 when Hernandez withdrew $10,000 from the company’s checking account. After investigation, it was confirmed that the USAA account did not belong to a company with which the company did business, but rather to Hernandez. The company thoroughly reviewed its books and records, identified Hernandez’s fraudulent purchases and transactions, and provided that information to federal law enforcement. The company’s efforts to identify Hernandez’s fraudulent conduct took years and helped advance the investigation and prosecution.
“This defendant stole resources he was hired to protect,” U.S. Attorney Randy Grossman said. “These thefts are devastating for small businesses. This is an important phrase that hopefully alerts other potential thieves to the fact that stealing from your employer has significant consequences. Grossman thanked the prosecution team, FBI and US Postal Service investigators for their work on the case.
“For years, Mr. Hernandez engaged in a scheme to defraud his employer – treating their business accounts as his own by writing checks and transferring money to each other, misusing his business credit card and by issuing duplicate paychecks,” the FBI special agent in charge said. Stacey Avg. “The FBI is proud to work with our partners at the U.S. Postal Service to identify and hold accountable those who abuse their placement and access for personal gain. I hope today’s sentence will put an end to the victims. »
“The United States Postal Inspection Service plays a vital role in these types of fraudulent schemes involving embezzlement. Every day, U.S. Postal Inspectors protect our postal customers, businesses, and the public from such fraudulent scams involving U.S. Mail,” said Carroll N. Harris III, Postal Inspector in Charge of the Los Angeles Division.
DEFENDANTS Case number 20-cr-3665-JLS
Matthew P. Hernandez Age: 46 Riverside, CA
Wire Fraud – Title 18, USC, Section 1343
Maximum penalty: Twenty years in prison and a fine twice the pecuniary loss of $356,644.46 resulting from the offense
Federal Bureau of Investigation
United States Postal Service