Payroll company CEO sentenced for stealing $18 million from Sacramento County
Law Magazine May 5th. 2011, 3:11amThe head of a New York payroll company was sentenced Friday to 6 1/2 years in federal prison for stealing $18 million from Sacramento County.
U.S. District Court Judge Garland E. Burrell Jr., who started his legal career as a prosecutor for the county, said Albert Cipoletti violated his position of trust as chief executive officer of Ingentra HR Services.
Sacramento County sent money to Ingentra to handle payroll taxes for special districts, but the company understated the amount in its filings to the Internal Revenue Service. From 2005 to 2010, the company handled payroll taxes for about 3,000 special-district employees.
Cipoletti and a co-defendant were accused of stealing $20 million altogether, with some money also coming from Stanley Works and Stanley Solutions Inc. and SanDisk Corp.
Cipoletti’s attorney, Joseph Wiseman, tried to argue that the judge shouldn’t consider the emotional impact of the crime on Sacramento County employees, saying it could improperly influence the judge.
Burrell seemed offended by the argument, saying judges hear emotional testimony all the time and make impartial and fair rulings. He allowed county Finance Director Julie Valverde to testify during the sentencing hearing.
Valverde told the court that Cipoletti’s crime has created great problems in a time of extreme duress as the county has also struggled with consecutive years of budget deficits. The county has been in discussions with the IRS about payment of the back taxes.
Valverde said her staff has spent long hours processing the payroll taxes since Ingentra’s wrongdoing was discovered.
“It has been especially agonizing for our staff,” she said. “I don’t want this kind of fiscal hardship hanging over my head. I don’t want the county’s image to suffer more because of the fraudulent activity of Mr. Cipoletti.”
Cipoletti’s sentencing marks “an important milestone for the county,” interim County Executive Steve Szalay said after the hearing.
He said his office is taking steps to ensure future fraud is avoided, including new rules that county supervisors will soon consider that would require contractors to provide information about their finances, experience and litigation history.
Cipoletti pleaded guilty to one count of wire fraud last year, not long after federal investigators started their probe.
Burrell disagreed with some parts of the plea agreement, because it didn’t take into account the trust he said Cipoletti violated as the company’s owner.
Still, he ended up sentencing Cipoletti to the time expected under the plea agreement, attorneys for both sides said after the hearing. Both said they were satisfied with the sentence.
Burrell also ordered Cipoletti to pay the $20 million he owes, although it’s not clear when, if ever, he will be able to do that.
Cipoletti, 62, wore a gray business suit and declined to make a statement to the judge before his sentencing. He agreed to enter federal custody in Brooklyn, N.Y., in July. He hopes to be incarcerated in his home state of New York.
The other defendant in the case, Kerry Seaman, who was Ingentra’s controller, is scheduled for sentencing in July.
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