NY Man Charged in $8M Benefit Plan Embezzlement

November 12, 2008 (plansponsor.com) - A former benefits manager for Hitachi America, Ltd., was arrested Wednesday by federal authorities on charges he embezzled about $8 million from a company benefit plan.

According to a news release, Dennis M. Dowd, formerly the senior manager of human resources, was accused of diverting the money from the Hitachi America Ltd. Group Health and Welfare Plan.

The funds were put into an unauthorized bank account and Dowd then drew on those funds for personal credit card bills and other expenses, according to the charges. Dowd, who was hired in 1979, was in the position until March 2008.

The announcement said Dowd opened the unauthorized bank account in January 1997, in the name “Hitachi Group Insurance Health and Welfare Trust.” He was charged with depositing into the account between 2000 and early 2008 approximately $4.9 million from insurance claim payments belonging to the plan.

Checks totaling an additional approximately $2.9 million from, among other entities, insurance companies and health care providers that were made payable to the plan or to Hitachi America were also deposited into the account, according to the charges.

The federal investigators claimed Dowd used the money for, among other things, at least $1 million in payments to credit cards held in Dowd’s name. Also, according to the news release, at least $2 million in checks were made payable to Dowd using various spellings of his name; approximately $42,000 was paid for a Lexus automobile registered to Dowd; and approximately $625,000 was paid to purchase a house in Vero Beach, Florida.

Dowd is charged with one count of embezzlement in connection with health care, one count of health care fraud, and one count of money laundering. He faces a total maximum sentence of 30 years imprisonment if convicted.