Former executives sentenced in $1.9 million fraud scheme
DENVER, Colo. (KRDO) -- Two men in Colorado have been sentenced to federal prison after a scheme that defrauded a Colorado-based data management company of nearly $2 million.
Michael Vergato, 52, has been sentenced to 46 months in federal prison and fined $20,000. His co-defendant, Mark Perlstein, 60, received a 25-month prison sentence and a $15,000 fine, according to the United States Attorney’s Office for the District of Colorado (USACO).
USACO says they have ordered restitution of $1,949,023, for which both men are liable. The court also states that each man will serve three years of supervised release after their prison terms.
According to USACO, from 2013 to 2020, Vergato, the vice president at Arrow Electronics, and Perlstein ran a fraud scheme. Vergato created a shell company, Oracle Performance Tuning and Optimization (OPTO), and billed Arrow for database tuning services that were never performed. OPTO submitted 21 fake contracts and invoices, which Perlstein approved, and he then wired payments to the shell company.
USACO states that, with this scheme, the men divided the proceeds and concealed their identities using personal email accounts and fake identities; this included Vergato using his stepdaughter's identity.
According to Arrow Electronics, they paid OPTO $1,949,023. Of that amount, Vergato retained approximately $874,000, using the money for luxury vehicles, credit card payments, retirement accounts, and rent. Perlstein received more than $1 million through the scheme, says USACO.
“These defendants’ greed has earned each of them years in federal prison, and they have to pay back every dollar they took,” said United States Attorney Peter McNeilly. “Corporate fraud of this magnitude undermines confidence in our business community and harms employees, customers, and shareholders alike. These sentences send a clear message: executives who abuse their authority for personal gain will be held accountable.”
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