Patrick Lindsey, Corporate Accounting Fraud, Virginia 2023

Former Vice President Sentenced to 27 Months in Prison for Corporate Accounting Scheme

RICHMOND, Va. - In a shocking turn of events, Patrick Lindsey, former Vice President of Preconstruction Services at MGT Construction, was sentenced to 27 months in prison for his role in a corporate accounting scheme that concealed millions of dollars in debt owed by the company.

According to court documents, Lindsey, 43, of Midlothian, was involved in a large-scale corporate accounting fraud scheme designed to conceal the fact that MGT Construction was more than $20 million in debt. This scheme, which lasted for five years, involved the regular movement of job-cost invoices from nearly finished projects to more recent construction projects, falsely inflating profit margins and concealing losses.

Lindsey had primary day-to-day management of the accounting scheme, which generated a wholly inaccurate picture of MGT's profitability. The company and its parent company submitted the products of these fraudulent accounting manipulations as part of MGT's application packages to banks and insurance companies for lines of credit and bonding coverage.

During the conspiracy, Lindsey moved or deleted thousands of job cost invoices, concealing the fact that, by the time the scheme was uncovered in November 2016, MGT Construction was over $20 million in debt. When the accounting fraud was exposed, MGT Construction owed millions of dollars in outstanding invoices that it could not pay to dozens of contractors, subcontractors, and vendors who had provided their services or products to MGT Construction.

As a result, MGT filed for Chapter 7 bankruptcy in early 2018. The deceit not only maintained Lindsey's job and padded his annual compensation package, but it also proved devastating to the individuals who worked on MGT Construction projects and were left holding the bag after the fraud scheme was uncovered.

U.S. District Judge M. Hannah Lauck sentenced Lindsey to 27 months in prison. Assistant U.S. Attorney Thomas A. Garnett prosecuted the case.

The U.S. Attorney's Office for the Eastern District of Virginia, FBI's Richmond Field Office, IRS-Criminal Investigation, and U.S. Postal Inspection Service announced the sentencing. The case highlights the importance of combating corporate malfeasance and holding accountable executives who manipulate others for personal gain.

Source: https://www.justice.gov/usao-edva/pr/former-vice-president-construction-management-company-sentenced-corporate-accounting