Tuesday, June 12, 2012

David Newmark Sentenced to 54 Months in Prison for Wire Fraud and Tax Evasion

Source-  http://www.fbi.gov/newark/press-releases/2012/former-cfo-of-new-jersey-investment-management-company-sentenced-to-54-months-in-prison-for-wire-fraud-and-tax-evasion 

NEWARK—The former chief financial officer of Columbus Hill Capital Management LP, an investment management firm based in Short Hills, New Jersey, was sentenced today to 54 months in prison for embezzling more than $10.4 million from his employer, U.S. Attorney Paul J. Fishman announced.

David Newmark, 39, of Towaco, New Jersey, previously pleaded guilty before U.S. District Judge William H. Walls to an information charging him with one count of wire fraud and one count of tax evasion. Judge Walls imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court:

Between February 2008 and March 2011, Newmark embezzled from his former employer by requesting checks and wire transfers from custodians of the investment management company accounts and diverting the funds to bank accounts he controlled. Newmark deposited the checks and wires—including a single wire transfer of more than $2.4 million in April 2010—into a bank account he set up with a name similar to that of his employer. The majority of the $10.4 million that Newmark embezzled came from the management company rather than investor funds.

For the 2008 tax year, Newmark did not disclose to the IRS more than $2.8 million he received in connection with the fraudulent scheme. That failure resulted in a tax loss to the United States of $1,012,441.

In addition to the prison term, Judge Walls sentenced Newmark to three years of supervised release and ordered him to pay $10,442,379.90 in restitution. On May 18, 2012, Judge Walls entered a preliminary order of forfeiture and to date, the United States has recovered more than $1.6 million.

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