LAWFUEL – Legal News & Jobs – Two men from Pennsylvania were charged today with federal mail fraud and tax charges related to a scheme in which they embezzled approximately $6.4 million from the food and beverage giant Nestle USA.
Both men – Henry Machinski, 50, of Archbald, and Vincent Marchese, 51, of Allentown – have agreed to plead guilty to four felony charges.
In criminal informations filed this morning in United States District Court in Los Angeles, Machinski and Marchese were charged with three counts of mail fraud and filing a false tax return for failing to report the embezzled funds to the Internal Revenue Service.
Machinski was a sales manager for Nestle USA, and his sales territory included Pennsylvania. To perpetrate the scheme, Machinski, created false invoices from an “A & P” grocery store, which he sent to Nestle in Glendale, California. Relying on those fake invoices, Nestle authorized payments to “A & P” for promotions to increase the sale of Nestle products at “A & P” grocery stores. Marchese, who had no connection to the real A & P grocery chain, set up a bank account in the name of “AP” to which he deposited payments fraudulently received from Nestle. From September 2001 through June 2005, when Nestle’s auditors discovered the scheme, Machinski and Marchese embezzled a total of $6.4 million.
Additionally, Marchese admitted that he failed to report as income an additional $4 million that he skimmed from his grocery store franchise in Allentown. Marchese wrote business checks to Machinski from his Food For Less franchise that were disguised as grocery expenses. Machinski deposited the checks into his personal bank account and then returned the funds to Marchese. Marchese skimmed approximately $4 million from his Food For Less franchise in relation to this scheme.
Machinski and Marchese each face a maximum possible sentence of 63 years in federal prison. The plea agreements filed in this case contemplate sentences of approximately five to six years for each man, but this calculation is not binding on any judge.
Machinski admitted that he is responsible to pay $827,748 in back taxes, plus penalties and interest for the tax years 2001 through 2004. Machinksi must also file a tax return for 2005 that correctly reports the $267,593 he embezzled from Nestle during that year.
Marchese admitted that he is responsible for a total tax loss of $1,814,728 for the tax years 2000 through 2004. Marchese agreed to file a 2005 tax return that correctly reports as income $550,806 embezzled from Nestle.
The case against Machinski and Marchese was filed in United States District Court in Los Angeles. However, it is anticipated that the case will be transferred to federal court in Philadelphia, where each man is expected to plead guilty and be sentenced.
The case was investigated by agents of the Federal Bureau of Investigation and the Internal Revenue Service.
CONTACT: Assistant United States Attorney Ruth C. Pinkel