A former vice president with international carrier
QBE Insurance Group Ltd. has been charged with embezzling $2.6 million.
According to US prosecutors, James J. Shea began defrauding QBE in January 2012 by submitting false invoices and forging the name of the chief financial officer. Shea, who was tasked with integrating the insurer’s information technology systems, was aided by an outside consultant, Eugene Fallon.
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 scam was discovered when 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.
“Such alleged illegal siphoning of a company’s money has no place in any industry, and our office is committed to holding these individuals accountable for their alleged actions.”
QBE is not named in the criminal complaint filed by the US government Tuesday, and a spokesperson confirmed that QBE North America is cooperating fully in the investigation.
If convicted, Shea and Fallon could face sentences of 20 years in prison.
The case is being handled by the Office’s Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Daniel S. Goldman and Michael Ferrara are in charge of the prosecution, and Edward Diskant is in charge of the forfeiture aspects of the case.
