Michael Margiotta, Wire Fraud, New York 2024

ROCHESTER, N.Y. – In a shocking case of corporate deceit, former Rochester CEO Michael Margiotta, 51, was sentenced to serve 46 months in prison for his role in defrauding his own company, eHealth Global Technologies.

Margiotta, who was convicted of wire fraud and filing a false tax return, was ordered to pay restitution totaling $914,810.52 to the IRS. The sentencing is the culmination of an investigation by the Internal Revenue Service, Criminal Investigations Division, under the direction of Thomas Fattorusso, Special Agent-in-Charge, New York Field Office.

According to the evidence presented in court, Margiotta entered into a contract with Healthcare Network Alliance, LLC (HCNA) for employment recruiting services in May 2011. HCNA was owned by Margiotta’s wife. The agreement provided that HCNA would be compensated if candidates referred to eHealth were hired.

Between June 2011, and January 2014, Margiotta caused HCNA to submit invoices for recruiting services to eHealth that he knew that HCNA had not provided. For instance, on April 19, 2013, HCNA submitted an invoice to eHealth requesting payment of $44,000 for recruiting an employee. HCNA had not recruited the employee, and Margiotta knew that HCNA was not entitled to be paid a recruiting fee for the employee.

In total, Margiotta caused HCNA to prepare and submit fraudulent invoices for approximately 23 employees of eHealth that HCNA had not recruited totaling $380,960. Additionally, Margiotta filed a false tax return for the year 2013, claiming income of $260,334, in actuality, his taxable income was $611,195.00, resulting in a tax loss to the IRS of $137,067.

The case against Margiotta is a stark reminder of the severe consequences of corporate malfeasance. As the CEO of eHealth Global Technologies, Margiotta had a fiduciary duty to act in the best interests of his company and its stakeholders. Instead, he chose to engage in a scheme of deceit and corruption that ultimately led to his downfall.

Margiotta’s actions have not only resulted in financial losses for eHealth Global Technologies, but have also undermined the public’s trust in corporate leaders. It is our hope that this case will serve as a deterrent to others who would engage in similar behavior.