Ex-Wachovia exec gets prison in NC billing scam
Saturday, July 2, 2011
CHARLOTTE, N.C. (AP) — A former Wachovia Bank vice president will spend nearly six years in federal prison and have to pay roughly $13 million after being sentenced for his role in an embezzlement scam that defrauded the bank of millions.
U.S. District Court Judge Max Cogburn sentenced Scott Welch, 48, to 70 months in prison during court proceedings in Charlotte Thursday. Welch will also have to pay $11.2 million in restitution to Wachovia, and $1.7 million to the IRS. The government also seized a number of his assets, including his lakeside house in Mooresville.
A co-defendant, John Cousar Jr., was also sentenced Thursday. The 48-year-old retired Charlotte firefighter was sentenced to 33 months in prison, and is required to pay Wachovia more than $5.9 million, along with $1.1 million to the IRS.
Both men pleaded guilty last year to mail fraud conspiracy and tax charges. Welch, who served as vice president of utility services at the Wachovia Distribution Utility Center in Charlotte from 2000 through 2008, oversaw the handling of invoices submitted by vendors who provided goods and services to the bank.
According to court documents, Welch led a scam in which Cousar and other business owners submitted bogus invoices to the company for goods and services that were never provided. Welch then received kickbacks from the payments.
The scheme generated about $11 million over eight years, ending shortly after Charlotte-based Wachovia announced it would be bought by San Francisco-based Wells Fargo. Prosecutors have not said how the scam was discovered, but Cogburn did say Welch and Cousar assisted authorities in unraveling the details of the scheme.
Three other men have pleaded guilty to participating in the embezzlement. They are awaiting sentencing.
“Welch betrayed Wachovia’s trust by engaging in this eight-year, bogus invoice scheme to steal $11.2 million,” U.S. Attorney Anne Tompkins said.