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Joseph M. Palazzo, 31, Sentenced to 11 Years in Prison for $3.4 Million Embezzlement
A former employee of the Cuyahoga Heights School District in Ohio has been sentenced to 11 years in prison for stealing $3.4 million from the district.
Joseph M. Palazzo, 31, of Independence, Ohio, was sentenced to 136 months in prison by U.S. District Judge Benita Pearson on [date]. Palazzo was also ordered to pay $3.4 million in restitution.
Palazzo, who was employed as the Information Technology Director for the Cuyahoga Heights School District until February 2011, was charged with conspiracy to commit mail fraud, conspiracy to commit money laundering, and wire fraud.
According to court documents, Palazzo devised a scheme to divert millions of dollars of district funds to his personal use and the personal use of others. He submitted false invoices to the district, which were approved by him or forged by another, for services never performed, fictitious software and hardware, and software and hardware never received or already purchased by the district.
The companies named on the invoices were shell corporations established and owned by others working with Palazzo. The shell corporation owners kept approximately half of the stolen money themselves and funneled the remainder of the money back to Palazzo for his personal use.
As a result of Palazzo’s conduct, the district was defrauded and sustained a total loss of at least $3,333,448.
Palazzo also engaged in a second scheme to defraud the district, purchasing personal electronic items and altering invoices to falsely reflect that classroom items had been purchased for the district. He then sold the personal electronic items to third-parties at a discounted price and kept the money for his own personal use.
Palazzo’s actions were uncovered by investigators from the IRS Criminal Investigation and the FBI’s Cleveland Office.
Key Facts
- State: Ohio
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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