Friday, August 4, 2006

Former Broker to Archdiocese of New York Pleads Guilty

Fraud Update reports here that a former broker to the Archdiocese of New York pleads guilty to
fraud, tax and obstruction of justice charges.  The press release of the DOJ, states the Indictment charged the defendant and his co-defendants with:

"using their positions as employees and consultants at Institutional Commodity Services Inc. (ICS), the purchasing arm of the archdiocese, to defraud the archdiocese of more than $2 million from 1996 until 2004."

The press release also states that:

"According to the charges, numerous vendors doing business with the ICS were required to pay DeRusso more than $1.2 million, ostensibly as commissions, which DeRusso secretly shared with the others charged. Of this money, at least $385,000 was paid in cash. The prices charged to ICS included the amount of the commissions, which resulted in the archdiocese paying artificially inflated prices for the goods and services procured by DeRusso. In addition, DeRusso and his co-defendants embezzled more than $1 million from the archdiocese through a self-dealing scheme in which they diverted funds earmarked to buy food for the children enrolled in the archdiocese’s schools to companies they secretly owned and controlled."


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