Michael Margiotta, Wire Fraud and Filing a False Tax Return, New York 2011

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Table of Contents

Rochester CEO Pleads Guilty to $380,960 Wire Fraud Scheme

BUFFALO, N.Y. – In a shocking turn of events, Michael Margiotta, 50, of Rochester, NY, has pleaded guilty to wire fraud and filing a false tax return, leaving many wondering how a respected CEO fell so far.

According to court documents, Margiotta was employed as the Chief Executive Officer of eHealth Global Technologies, a position he held until he perpetrated the massive scheme. In May 2011, as eHealth CEO, Margiotta entered into a contract with Healthcare Network Alliance, LLC (HCNA), a company owned by his wife. The agreement provided that HCNA would be compensated if candidates referred to eHealth were hired.

However, 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 defendant 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.

In addition to the wire fraud scheme, Margiotta also 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 plea is the culmination of an investigation by the Internal Revenue Service, Criminal Investigations Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge, New York Field Office.

Sentencing is scheduled for October 28, 2021, at 9:30 a.m. before Judge Charles J. Siragusa. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Michael Margiotta’s downfall marks a stark reminder of the dangers of unchecked power and greed. As the investigation unfolds, one thing is clear: justice will be served, and those responsible will be held accountable for their actions.

Assistant U.S. Attorney John J. Field, who is handling the case, stated that the defendant was employed as the Chief Executive Officer of eHealth Global Technologies. Field added that Margiotta’s actions were a brazen attempt to line his own pockets at the expense of his company and the taxpayers.