PHILADELPHIA – United States Attorney William M. McSwain announced that Steven J. Russo, 43, of Pennsburg, PA, was sentenced by U.S. District Court Judge Jeffery L. Schmehl to three years in prison, three years of supervised release, and ordered to pay $2,798,000 in restitution to the victim and $980,000 in restitution to the IRS, for embezzling nearly $3 million from his former employer and making false statements on his federal income tax returns.
The defendant pleaded guilty in June 2020 to wire fraud related to the embezzlement scheme, and to filing false tax returns. Russo had served as the Director of Information Technology for a design and manufacturing company headquartered in Lancaster, PA, and over a period of almost six years embezzled money from the company in a variety of ways. His schemes included the use of sham corporations with virtual addresses, fake invoices, and access to the company’s credit cards and on-line accounts. Russo would use those company owned accounts to make unearned payments to the sham companies owned and controlled by him, and to purchase items that he kept for his personal use or sold for personal gain. Russo also filed false tax returns, failing to report his income accurately and claiming false expenses and deductions, resulting in a tax debt to the IRS of nearly $1 million.
“Embezzlement and tax fraud are forms of stealing, pure and simple,” said U.S. Attorney McSwain. “Russo held a senior position of trust with his former employer, and shamefully used that access to steal millions of dollars, while also ripping off the government (and honest tax payers) in the process. My Office will continue to work with our law enforcement partners to protect innocent businesses and taxpayers from being victimized by this type of fraud.”
“Mr. Russo’s decision to use deceit and fraud to line his pockets with his employer’s money and shirk his tax obligations has cost him his freedom,” said IRS Criminal Investigation Special Agent in Charge Thomas Fattorusso. “This sentence should serve as a deterrent to those who might contemplate similar actions.”
The case was investigated by the Internal Revenue Service – Criminal Investigations, and is being prosecuted by Assistant United States Attorney Bea L. Witzleben.