Police & Fire

Klein Gets 77 Months in Fire Department Embezzlement Case

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Michael Klein Credits: File photo
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WHITE PLAINS, N.Y. - Michael Klein, the former Mahopac Volunteer Fire Department (MVFD) treasurer who embezzled $5.7 million from the company’s coffers, was sentenced in U.S. District Court Wednesday afternoon to serve 77 months in federal prison.

In addition to the prison sentence, Klein, 49, was sentenced to three years of supervised release. District Court Judge Cathy Seibel also ordered Klein to forfeit $5,675,360.49 in ill-gotten gains, as well as various assets, including his residence in Palm City, Fla., and pay restitution. 

On March 7, Klein pleaded guilty to one count of wire fraud; six counts of subscribing to false tax returns; one count of obstructing the grand jury’s investigation; and one count of making false statements to the United States attorney.             

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“On hundreds of occasions over more than 13 years, Michael Klein stole from the volunteer fire department he was elected to serve,” said Joon H. Kim, the acting United States attorney for the Southern District of New York. “Klein took more than $5 million of the fire department’s money and used it to buy himself several boats, luxury cars, cruises, and tens of thousands of dollars of jewelry. Then he lied about it on his taxes, and obstructed the investigation of his crimes. Now, he has been sentenced to the lengthy prison term that his crimes merit.” 

Klein was first elected treasurer of the MVFD in 2001.  Prosecutors said that from about January 2002 to September 2015, he embezzled department funds under his control by writing checks to his two businesses, Abbie Graphic Services, Ltd. (“Abbie Graphic”) and Buckshollow Emergency Equipment Corp. (“BEEC”). They said he then deposited the checks to bank accounts held by Abbie Graphic and BEEC and entered those checks into the MVFD’s books as having been made payable to various vendors other than his two businesses, both of which sold firefighting equipment or services used by fire departments. 

Court documents revealed that in order to satisfy MVFD’s auditors, Klein prepared numerous false invoices to match the entries in the department’s books.   

 Klein embezzled more than $5.6 million by writing more than 275 checks over a period of more than 13 years.  He used the money to purchase, among other things, a 37-foot Thunderbird Formula boat; a 29-foot Everglades boat; a 55-foot Neptunus motor yacht named “K’Bam;” the second residence in Palm City; a 2010 Mercedes-Benz S550; a 2008 Jeep Liberty; and an antique fire truck. 

In January 2013, prosecutors say Klein went on what appears to be a Caribbean vacation and purchased $38,658.46 worth of jewelry and other items within two weeks. He also used the money he stole to support his two businesses. 

Additionally, IRS investigators said he 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 the embezzlement in September 2015, prosecutors said Klein obstructed the grand jury’s investigation of his conduct by making several false statements regarding his finances and concealing and dissipating assets. In September 2015, they said he concealed the proceeds he received from the sale of a Corvette by giving the money to a relative to deposit in 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; sold a 2012 Victory motorcycle, converting the proceeds to cash; and transferred $58,000 to his mother as purported repayment of a college loan. In April 2016, Klein sold his yacht “K’Bam,” which he had purchased for $260,000 in 2012, for $136,850.46.  In May 2016, he 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 his Florida property.  

Kim praised the investigative work of the IRS, FBI, New York State comptroller, and state police and thanked the Putnam County District Attorney’s Office for its assistance in the investigation.

Many members of the Mahopac Fire Department attended the sentencing and spoke in court about how Klein’s crimes impacted the department and the community.

Mahopac News will have more on this story as it develops.

 

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