In one of the largest cases of theft in the history of the volunteer fire service, the treasurer of the Mahopac Volunteer Fire Department pled guilty today to wire fraud, submitting false tax returns, obstructing a grand jury investigation, and making a false statement. Michael Klein was accused of embezzling over $5.6 million from the fire company over a thirteen-year period, starting in January 2002 until September 2015.
The case was investigated by the IRS Criminal Division, the FBI and New York State police resulting in Klein being indicted on federal charges. According to a press release issued by the US Attorneys Office for the Southern District of New York:
- U.S. Attorney Preet Bharara stated: “Michael Klein admitted today what we alleged – for over a decade, he violated the trust of his fellow volunteer fire fighters and used the Mahopac Volunteer Fire Department funds as his own slush fund. Klein took advantage of his position as the fire department’s treasurer and spent department money on himself, including paying for a yacht, a Florida home, jewelry, and an antique fire truck.”
- MICHAEL KLEIN was first elected treasurer of the MVFD in 2001. From January 2002 to September 2015, KLEIN embezzled MVFD funds under his control by writing checks to the two businesses he owned, Abbie Graphic Services, Ltd. (“Abbie Graphic”), and Buckshollow Emergency Equipment Corp. (“BEEC”). KLEIN then deposited the checks to bank accounts held by Abbie Graphic or BEEC. He entered these checks into the MVFD’s books as having been made payable to various vendors, other than Abbie Graphic or BEEC, that sold firefighting equipment or services used by fire departments.
- KLEIN embezzled more than $5.6 million by writing approximately 275 checks over a period of more than 13 years. He used the money to purchase, among other things, a 55’ Neptunus motor yacht named “K’Bam,” a second residence in Palm City, Florida, an antique fire truck, and jewelry. He also used the money to support Abbie Graphic and BEEC. KLEIN also failed to report most of this income on his personal tax returns for the period from 2009 through 2014, thereby subscribing to false tax returns for each of those years.
- Following law enforcement’s discovery of KLEIN’s embezzlement in September 2015, KLEIN obstructed the grand jury’s investigation of his conduct by making false statements regarding his finances and by concealing and dissipating assets. For example, KLEIN sold K’Bam for $138,868 even though he had purchased it for $260,000, listed it for sale for $229,000, and rejected an offer he received for $175,000. KLEIN also gave the United States Attorney a financial statement in which he falsely claimed, among other things, that BEEC had a delinquent loan of $275,000, and that, as a result of that loan, a lien was filed against KLEIN’s Florida property. KLEIN also concealed the proceeds he received from the sale of a Corvette by giving the money to a relative for deposit to her bank account and then arranging for the relative to pay his household bills. KLEIN also concealed an antique fire truck to prevent law enforcement from seizing it.
- KLEIN, 48, of Mahopac, New York, and Palm City, Florida, pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison; six counts of subscribing to false tax returns, each of which carries a maximum sentence of three years in prison; one count of obstructing the grand jury’s investigation, which carries a maximum sentence of 20 years in prison; and one count of making false statements to the United States Attorney, which carries a maximum sentence of five years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as the sentence will be determined by the court.
- In pleading guilty, KLEIN agreed to forfeit to the United States a sum of $5,675,360.49, his residence in Palm City, Florida, his equity in his yacht club in Palm City, Florida, cash held in various bank accounts, a 1931 American LaFrance antique fire engine, proceeds of a life insurance policy, a 2000 13′ Nautica vessel with an outboard motor, and a 2005 Eliminator trailer.
Klein will be sentenced in June. More on the story.