Administration March 11, 2009

Ex-Hitachi HR Manager Pleads to $6.1M Fraud

March 11, 2009 (PLANSPONSOR.com) - Dennis M. Dowd, formerly the senior manager of human resources of Hitachi America Ltd., has pleaded guilty to defrauding a company benefit plan of $6.1 million.
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The U.S. Attorney’s Office for the Southern District of New York said Dowd entered the plea in front of U.S. Magistrate Andrew J. Peck relating to the fraud scheme focusing on the Hitachi America Ltd. Group Health and Welfare Plan.

Dowd, 52, of Yorktown Heights, New York, pleaded guilty to one count of health care fraud and one count of money laundering. He was senior manager of corporate benefits for Hitachi America until March 2008, where he was responsible for managing employee benefits programs, including the plan involved in the case.

According to prosecutors, Dowd deposited approximately $8 million into an unauthorized bank account between 2000 and early 2008, including $4.9 million from an excess insurer, which covered beneficiary payments over a  certain dollar limit (see  NY Man Charged in $8M Benefit Plan Embezzlement ).

Court documents said checks totaling an additional $2.9 million belonging to the plan or the company, were also deposited into the account. According to the allegations, the checks were from, among other places,  insurance companies and health care providers that were made payable to the plan or to Hitachi America or a corporate affiliate.

Buying a Florida Home and a Lexus

Prosecutors alleged Dowd used the account to pay for personal and family expenses, including at least $1 million in payments to credit cards held in Dowd’s name. According to the allegations, the fund went to items such as:

  • at least $2 million in checks made payable to Dowd using various spellings of Dowd’s name;
  • approximately $42,000 for a Lexus automobile registered to Dowd; and
  • approximately $625,000 to purchase a house in Vero Beach, Florida.

Of the approximately $8 million dollars deposited into the account, prosecutors said Dowd gave a total of approximately $1.9 million back to Hitachi.

Dowd faces a total maximum sentence of 20 years in prison. He also agreed to the forfeiture of $6.1 million, several bank accounts, the Lexus automobile, and property located in Point Lookout, New York, and Vero Beach, Florida.

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