NY Utility Company Employee Admits Stealing $4 Million
A former utility company manager in New York admitted he schemed to steal more than $4 million from his company and its customers over nine years, federal authorities said.
John Farchione, 65, pleaded guilty to felony counts of honest services fraud, mail fraud, conspiracy and aggravated identity theft in Manhattan federal court Wednesday.
Prosecutors said Farchione kept millions of dollars in customer payments to the New York utility company and then manipulated the computer and accounting systems to hide the theft from 2005 through 2016.
As a manager in customer operations, he worked with another man, Louis Bendel, who operated a payment collections business on behalf of the utility, to come up with the scheme to steal money, according to prosecutors. The two submitted fake checks and payments to the utility company in the amounts owed by customers who were giving cash to Bendel, believing he would submit it to the utility for them.
The two men were actually keeping the cash for themselves, and even marking up positive balances on certain customer accounts related to the scheme. Then when the company issued refunds that weren't actually due to those customers, the proceeds were stolen and split by Farchione and Bendel, according to prosecutors.
Farchione is scheduled to be sentenced on Nov. 16. Three of the felony counts to which he pleaded guilty each carries a maximum sentence of up to 20 years in prison; the aggravated identity theft charge carries a mandatory sentence of two years in prison, to be served consecutively to any other sentence imposed.
Bendel previously pleaded guilty in connection with his role in the scheme.