Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that JOHN FARCHIONE, a former manager at a public utility company, was sentenced last Friday to seven years in prison for fraud and identity theft offenses in connection with his theft of more than $6 million from his employer and its customers. FARCHIONE pled guilty on August 6, 2018, following the commencement of trial, before United States District Judge J. Paul Oetken, who also imposed the sentence.
U.S. Attorney Geoffrey S. Berman said: “John Farchione exploited his position to steal millions of dollars from his employer, a public utility company relied upon by millions of New Yorkers. His conduct was corrosive to the integrity of the utility, and today’s sentence sends an important message to any other person in a position of financial trust that fraud and abuse of those positions will lead to severe consequences.”
According to the Indictment, other filings in Manhattan federal court, and evidence presented in court at sentencing:
From at least 2005 through November 2016, FARCHIONE engaged in fraudulent schemes resulting in the theft of more than $6 million from his public utility employer (the “Public Utility”) and its customers.
FARCHIONE, who was employed by the Public Utility as a manager in Customer Operations, devised and implemented the schemes using his knowledge of the Public Utility’s billing and payment processes. FARCHIONE carried out the scheme with a co-conspirator who also has pled guilty in connection with the scheme. FARCHIONE’s co-conspirator operated a business that aggregated payments from customers of the Public Utility for the purpose of passing such payments on to the Public Utility. FARCHIONE conspired to submit fraudulent checks and payments to the Public Utility, in amounts owed by customers who provided cash believing the payments would be submitted to the Public Utility on their behalf.
In fact, however, FARCHIONE and his co-conspirator kept the customer cash for themselves and submitted fraudulent checks to the Public Utility that purported to convey aggregated payments by multiple customers of the Public Utility. FARCHIONE, by virtue of his position as an employee of the Public Utility, was able to conceal the nature of the fraudulent checks, and thereby perpetuate the fraudulent scheme, through his knowledge of and access to the Public Utility’s account payment system.
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In addition to the prison term, Judge Oetken ordered FARCHONE, 66, to pay restitution in the amount of $7,223,641.46. FARCHIONE was also sentenced to three years of supervised release.
FARCHIONE pled guilty on August 6, 2018, to one count each of honest services fraud, mail fraud, conspiracy to commit honest services and mail fraud, and aggravated identity theft.
Mr. Berman praised the outstanding work of the Federal Bureau of Investigation in this investigation.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Alex Rossmiller and Sidhardha Kamaraju are in charge of the prosecution.
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