Ex-HR Chief Gets 57-Month Jail Term in $6M Benefits Plan Swindle

September 23, 2009 (PLANSPONSOR.com) - Hitachi America's former HR director has been sentenced to a 57-month jail term in connection with his guilty plea to charges he defrauded the Hitachi America Group Health and Welfare Plan of more than $6 million.

A news release from federal prosecutors in New York said the sentence was imposed by U.S. District Judge Colleen McMahon on defendant Dennis M. Dowd after Dowd’s guilty plea in March to one count of health-care fraud and one count of money laundering (see  Ex-Hitachi HR Manager Pleads to $6.1M Fraud ).

According to court documents, Dowd, 53, of Yorktown Heights, New York, was hired by Hitachi America in 1979 and was a senior manager of corporate benefits for Hitachi America until March 2008. He was responsible for managing various aspects of Hitachi America’s employee benefits programs, including the health and welfare plan.

Between 2000 and early 2008, Dowd deposited almost $8 million into an account he had opened without company authorization in the form of checks from, among other entities, insurance companies and health-care providers.

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 that were used to purchase consumer goods; at least $2 million in checks made payable to Dowd; approximately $42,000 for a Lexus automobile registered to Dowd; and approximately $625,000 to purchase a house in Vero Beach, Florida.

In addition to the prison term, McMahon sentenced Dowd to three years of supervised release, and ordered him to pay restitution to Hitachi America of $7,497,906.