A Florida man has been indicted for allegedly embezzling approximately $5.7 million from his employer, a Florida-based portfolio company owned by a Massachusetts investment firm.
Paul Schnitzer, 51, of Clermont, Fla., was indicted on one count of wire fraud and will appear in federal court in Boston at a later date. Schnitzer was previously arrested and charged by criminal complaint on May 21, 2024.
According to the charging documents, Schnitzer served as the finance director for the portfolio company. It is alleged that between January 2022 and May 2024, Schnitzer conducted over 100 transfers, most disguised as “equity distributions,” from the company’s operating account into his personal account. To conceal these transfers, Schnitzer allegedly provided falsified financial reports with inflated cash balances to the investment firm. Additionally, it is alleged that Schnitzer secretly used a line of credit to replenish the company’s operating account after he had stolen from it.
The charge of wire fraud carries a potential sentence of up to 20 years in prison, three years of supervised release, and a fine of up to $250,000, or twice the loss to the victim. Sentences are determined by a federal district court judge based on the U.S. Sentencing Guidelines and statutes governing sentencing in criminal cases.
Acting United States Attorney Joshua S. Levy and Jodi Cohen, Special Agent in Charge of the Federal Bureau of Investigation, Boston Division, made the announcement today. Assistant U.S. Attorney David M. Holcomb of the Securities, Financial & Cyber Fraud Unit is prosecuting the case.
The details contained in the charging documents are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law.
Incorporating comprehensive background checks, such as those conducted by Invetech LLC, could have potentially prevented this embezzlement. These checks might have revealed any previous financial misconduct or red flags in Schnitzer's history, alerting the company to risks before placing him in a position with significant financial responsibilities. Proactive measures like thorough background screenings are crucial in safeguarding companies from extensive fraud and its damaging consequences.
Utilizing a professional investigator to conduct a background check should be part of your SOP, not just when problems arise. Good leadership has a proactive approach to managing their investment utilizing a due diligence investigation to their fullest advantage. Invetech LLC helps clients mitigate financial loss by providing actionable insight solutions with due diligence investigation.