Insurance CFO jailed over $600K fraud

An insurance company exec swindled his own company out of more than half a million dollars in order to fund his own startup companies

Insurance CFO jailed over $600K fraud

Insurance News

By Ryan Smith

A former health insurance executive is headed to prison for embezzling more than $600,000, according to an Associated Press report.

Zachary Augustus Smulski, former chief financial officer of Washington state-based Soundpath Insurance, was found guilty of embezzling $632,000 from the company, according to the AP. Smulski paid the money back as soon as he got caught, and paid an additional $29,000 after sentencing to cover the fees Soundpath had incurred as a result of his embezzlement.

Smulski was hired as Soundpath’s CFO in 2008, the AP reported. In 2011, he began embezzling money from the company in order to finance his own startups. But during a state audit in 2012, the company’s comptroller noticed suspicious activity.

At that point, Smulski returned the money by depositing a cashier’s check in Soundpath’s account at a bank, the AP reported. Smulski lied to other company executives about the source of the money and resigned, refusing to answer questions.

Prosecutors had asked for Smulski to receive 2 ½ years in prison after he pleaded guilty to three counts of wire fraud, saying he attempted to minimize his responsibility for the embezzlement.

“He claims that the diversion caused no harm because he always intended to return the diverted funds,” Assistant US Attorney Francis Franze-Nakamura wrote in a court filing. “This tale is beyond belief. Zachary Smulski is not a hero’ he is a thief and a con man.”

The prosecutors also noted that after leaving Soundpath, Smulski took a job at Idaho-based Glenns Ferry Health Center – without mentioning that he’d been suspected of embezzlement at his previous job.

Related stories:
Doctor receives 7-year sentence for insurance fraud scheme that net him millions
Insurance broker gets long custodial sentence after fraud

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