A former executive with Australia’s
QBE Insurance Group was sentenced Thursday evening to 1-1/2 years in US prison.
James Shea, then an executive vice president with QBE’s North American unit, was convicted of conspiring to embezzle $2.6 million from the firm, some of which he used to buy a house and luxury vehicles.
In addition to the prison sentence, Shea was also ordered to forfeit $1.81 million and jointly pay $2.65 million in restitution to QBE along with a co-defendant.
US District Judge Paul Engelmayer, who handed down the sentence in Manhattan, said Shea was driven by greed, envy and a desire to please his family.
“You abused the position of responsibility your company entrusted you with,” Engelmayer said.
Shea acquiesced, saying he was “extremely apologetic” for his crimes and that “there is never a good reason for what [he] did.”
Along with QBE consultant Eugene Fallon, the 49-year-old Shea submitted invoices for consulting services supposedly done by two entities but that were never completed. Shea forged the signature of QBE North America’s chief financial officer on the bogus contracts between the insurer and the entities and approved invoices Fallon provided for more than $2.65 million.
Together, they increased Shea’s $1.9 million salary by almost double. Near the end of 2013, Shea collected more than $1.8 million in additional funds by authorizing payments on phony consulting work done by Fallon. The payments were then routed back to Shea through his wife’s bank accounts, while Fallon collected the rest.
Shea is reported to have spent more than $4 million between 2008 and 2014, including $1 million in cash for a house, $102,000 in furniture, $38,401 for a Disney Report vacation and $18,233 at an Apple Store. The government believes part of this lifestyle was funded by the money stolen from QBE.
QBE’s CFO, meanwhile, said he had never heard of nor authorized the consulting work being done by Fallon.
The scheme took place from 2012 through 2013, and was finally discovered with investigators with the FBI found bank accounts affiliated with two of Fallon’s companies, along with invoices submitted to email addresses connected with Shea.
“Together, James Shea and Eugene Fallon allegedly developed a scheme to defraud the company for which Shea worked, and Fallon consulted. Both allegedly exploited their positions and their relationship for pecuniary gain, netting some $2.6 million in the process,” said US Attorney Preet Bharara in a statement.
Both Shea and Fallon were arrested in June and pleaded guilty in November to wire fraud. They were eligible for up to 20 years in prison.
Fallon has not yet been sentenced.
The case is US v. Shea, US District Court, Southern District of New York, No. 15-cr-00546.
