In a recent case that highlights the importance of trust in business relationships, an Information Technology (IT) consultant has been sentenced to 21 months in prison for embezzling hundreds of thousands of dollars from a small family-owned business. The consultant, Derek Gleeson, pleaded guilty to wire fraud charges, admitting that he charged the business for IT hardware, software, and services that were never provided. Gleeson further confessed to altering invoices and installing pirated software on the company’s servers to cover up his fraudulent activities. This scheme lasted four years and resulted in over $600,000 in losses for the business. The sentencing serves as a reminder of the severe consequences that can be faced by those who abuse positions of trust and harm small businesses.
Summary of Charges
In this case, an Information Technology (IT) consultant named Derek Gleeson was charged with wire fraud. He embezzled hundreds of thousands of dollars from a small family-owned business by charging them for IT hardware, software, and services that he never provided. Gleeson also created fake invoices to support the fraudulent charges. When the company became suspicious, he installed pirated software on their servers to make it appear that he had purchased and installed legitimate software. This scheme lasted for four years and resulted in over $600,000 in losses.
The defendant in this case is Derek Gleeson, a 51-year-old IT consultant from Round Rock, Texas.
The Federal Bureau of Investigation (FBI) was responsible for investigating the embezzlement case and bringing charges against Derek Gleeson.
Introduction to the crime
Embezzlement is a form of financial fraud where a person in a position of trust misappropriates funds or assets entrusted to them for personal gain. In this case, the IT consultant, Derek Gleeson, abused his position of trust within the small business to steal money through fraudulent charges and fake invoices.
Details of the embezzlement
Gleeson embezzled money from the small business by charging them for IT hardware, software, and services that he never provided. He manipulated invoices and installed pirated software on the company’s servers to cover up his fraudulent activities. Over a period of four years, he stole over $600,000 from the business.
In November 2022, Derek Gleeson pleaded guilty to a wire fraud charge. He admitted to the scheme of charging the small business for IT products and services that were never provided, as well as altering invoices to support the fake charges.
Gleeson was sentenced to 21 months in prison for his involvement in the embezzlement scheme. The sentence reflects the seriousness of his actions and the significant financial losses suffered by the small business.
Impact on the small business
The embezzlement scheme had a devastating impact on the small family-owned business. They suffered financial losses of over $600,000, which significantly impacted their operations and financial stability. The owners had to take measures to recover from the losses and rebuild trust with their clients and employees.
Discovery of fraudulent activities
The fraudulent activities of Derek Gleeson were discovered when the small business grew suspicious of the charges he was submitting. They initiated an internal investigation and sought the assistance of law enforcement agencies to further investigate the matter.
Evidence against the consultant
The evidence against Derek Gleeson included manipulated invoices, discrepancies in the IT expenses, and the installation of pirated software on the company’s servers. These pieces of evidence were crucial in proving his guilt and establishing the extent of the embezzlement scheme.
Role of the FBI
The FBI played a crucial role in the investigation of this case. They worked closely with the prosecutors to gather evidence, interview witnesses, and build a strong case against the IT consultant. Their expertise and resources were instrumental in bringing the case to a successful resolution.
Impact on Small Business
The embezzlement scheme orchestrated by Derek Gleeson resulted in financial losses of over $600,000 for the small business. These losses had a significant impact on their operations, cash flow, and profitability. The owners had to bear the burden of these losses and take measures to recover and stabilize their business.
Repercussions for the business
The embezzlement case had negative repercussions for the business beyond the financial losses. The owners had to regain the trust of their clients and employees who were affected by the fraudulent activities. They also had to invest additional time, effort, and resources to strengthen their internal controls and prevent future incidents of embezzlement.
Steps taken to prevent future embezzlement
After the embezzlement case, the small business took several steps to prevent future incidents of embezzlement. They implemented stricter financial controls, such as requiring multiple approvals for expenses and conducting regular audits. They also enhanced their IT security measures to prevent unauthorized access and manipulation of financial records.
Role of the Information Technology Consultant
Responsibilities of an IT consultant
An IT consultant is responsible for providing expert advice and services related to information technology. They work closely with businesses to assess their technology needs, develop IT strategies, and implement and maintain IT systems. IT consultants have access to sensitive information and play a crucial role in ensuring the security and efficiency of a company’s IT infrastructure.
Abuse of trust
The embezzlement case highlighted the abuse of trust by Derek Gleeson, the IT consultant. He exploited his position and access to the small business’s IT system to carry out his fraudulent activities. The case serves as a reminder of the importance of trust and integrity in the relationship between a business and its IT consultant.
Methods of embezzlement
Derek Gleeson embezzled money by charging the small business for IT products and services that he never provided. He created fake invoices and manipulated financial records to support his fraudulent charges. Additionally, he installed pirated software on the company’s servers to cover up his actions and make it appear that he had purchased legitimate software.
Importance of internal controls
The embezzlement case underscores the importance of having robust internal controls in place to prevent and detect fraudulent activities. Businesses should implement procedures that require multiple approvals for expenses, conduct regular audits, and segregate duties to minimize the risk of embezzlement.
Background checks for consultants
To mitigate the risk of hiring individuals with a propensity for fraudulent activities, businesses should conduct thorough background checks before hiring IT consultants or any employees who have access to sensitive financial information.
Regular auditing is crucial in identifying and preventing embezzlement. By conducting periodic audits, businesses can verify the accuracy of their financial records, detect inconsistencies or discrepancies, and address any potential issues before they escalate.
Maximum penalty for wire fraud
The maximum penalty for wire fraud, which Derek Gleeson was charged with, is twenty years in prison and a $250,000 fine. The severity of the penalty reflects the seriousness of the offense and the impact it had on the small business.
Factors considered in sentencing
During the sentencing process, several factors were taken into account, including the duration and extent of the embezzlement scheme, the financial losses suffered by the small business, and the defendant’s level of involvement and responsibility. These factors helped determine the appropriate sentence for Derek Gleeson.
Comparison to similar cases
The sentencing in this case may serve as a precedent for future embezzlement cases involving IT consultants or other professionals in positions of trust. It provides a reference point for judges and legal professionals when determining penalties in similar cases based on the severity of the offense and its impact on the victims.
Preventing Embezzlement in Small Businesses
Implementing financial controls
Small businesses can prevent embezzlement by implementing strong financial controls. These controls may include requiring multiple approvals for expenses, segregating duties to prevent a single individual from having full control over financial transactions, and regularly reviewing financial records for inconsistencies.
Transparency is crucial in preventing embezzlement. Business owners should maintain open lines of communication with their employees, encouraging them to report any suspicious activities or concerns. Regularly communicating the company’s financial policies and procedures can also help deter potential embezzlement.
Educating employees about fraud
Educating employees about the risks of fraud and embezzlement can help create a culture of integrity within the organization. Training sessions, workshops, and clear guidelines on ethical behavior can increase awareness and vigilance among employees, making it harder for fraudsters to carry out their schemes undetected.
The sentencing of Derek Gleeson, the IT consultant involved in the embezzlement scheme, to 21 months in prison highlights the seriousness of embezzlement and its impact on small businesses. The case serves as a reminder of the importance of trust, internal controls, and regular audits in preventing and detecting fraud. Small businesses should take proactive measures to safeguard themselves against embezzlement, including implementing financial controls, maintaining transparency, and educating employees about fraud risks. The case also emphasizes the need for businesses to conduct thorough background checks when hiring IT consultants or any individuals with access to sensitive financial information. Overall, this case has significant implications for the IT consulting industry, reminding consultants of their responsibilities and the consequences of abusing trust.