Joon H. Kim, the Acting United States Attorney for the Southern District of New York, announced that MICHAEL KLEIN, the former treasurer of the Mahopac Volunteer Fire Department (“MVFD”), was sentenced today by U.S. District Judge Cathy Seibel to 77 months in prison for wire fraud, subscription to false tax returns, obstruction of the grand jury, and false statement charges arising out of his embezzlement of more than $5.6 million from the MVFD.
Acting U.S. Attorney Joon H. Kim said: “On hundreds of occasions over more than 13 years, Michael Klein stole from the volunteer fire department he was elected to serve. Klein took more than $5 million of the fire department’s money, and used it to buy himself several boats, luxury cars, cruises, and tens of thousands of dollars of jewelry. Then he lied about it on his taxes, and obstructed the investigation of his crimes. Now, Michael Klein has been sentenced to the lengthy prison term that his crimes merit.”
According to documents filed in court:
MICHAEL KLEIN was first elected treasurer of the MVFD in 2001. From in or about January 2002 to in or about September 2015, KLEIN embezzled MVFD funds under his control by writing checks to his two businesses, Abbie Graphic Services, Ltd. (“Abbie Graphic”) and Buckshollow Emergency Equipment Corp. (“BEEC”). KLEIN then deposited the checks to bank accounts held by Abbie Graphic and BEEC. He entered these checks into the MVFD’s books as having been made payable to various vendors other than Abbie Graphic or BEEC that sold firefighting equipment or services used by fire departments. To satisfy the MVFD’s auditors, KLEIN prepared numerous false invoices to match the entries in the MVFD’s books.
KLEIN embezzled more than $5.6 million by writing more than 275 checks over a period of more than 13 years. He used the money to purchase, among other things, a 37-foot Thunderbird Formula boat; a 29-foot Everglades boat; a 55-foot Neptunus motor yacht named “K’Bam;” a second residence in Palm City, Florida; a 2010 Mercedes-Benz S550; a 2008 Jeep Liberty; and an antique fire truck. In January 2013, KLEIN went on what appears to be a Caribbean vacation and made $38,658.46 worth of jewelry and cruise purchases within two weeks. KLEIN also used the money he stole from the MVFD to support Abbie Graphic and BEEC.
KLEIN failed to report most of this income on his personal tax returns for the period from 2009 through 2014, thereby subscribing to false tax returns for each of those years.
Following law enforcement’s discovery of KLEIN’s embezzlement in September 2015, KLEIN obstructed the grand jury’s investigation of his conduct by making false statements regarding his finances and by concealing and dissipating assets. In September 2015, KLEIN concealed the proceeds he received from the sale of a Corvette by giving the money to a relative for deposit to her bank account and then arranging for the relative to pay his household bills. KLEIN also concealed an antique fire truck to prevent law enforcement from seizing it; sold a 2012 Victory motorcycle, converting the proceeds to cash; and transferred $58,000 to his mother as purported repayment of a college loan. In April 2016, KLEIN sold his yacht “K’Bam,” which he had purchased for $260,000 in 2012, for $136,850.46. In May 2016, KLEIN gave the United States Attorney a financial statement in which he falsely claimed, among other things, that BEEC had a delinquent loan of $275,000, and that, as a result of that loan, a lien was filed against KLEIN’s Florida property.
On March 7, 2017, KLEIN pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison; six counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison; one count of obstructing the grand jury’s investigation, which carries a maximum sentence of 20 years in prison; and one count of making false statements to the United States Attorney, which carries a maximum sentence of five years in prison.
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In addition to the prison sentence, KLEIN, 49, of Mahopac, New York, and Palm City, Florida, was sentenced to three years of supervised release. Judge Seibel also ordered KLEIN to forfeit $5,675,360.49 in ill-gotten gains, as well as various assets, including his residence in Palm City, Florida. Judge Seibel also ordered KLEIN to pay $5,675,360.49 in restitution.
Mr. Kim praised the outstanding investigative work of the IRS, FBI, New York State Comptroller, and New York State Police. He thanked the Putnam County District Attorney’s Office for its assistance in the investigation.
This case is being handled by the Office’s White Plains Division. Assistant United States Attorneys Olga Zverovich, James McMahon, Andrew Dember, Maurene Comey, Michael Maimin, and Lauren Schorr are in charge of the prosecution.