Two former executives of a Pennsylvania-based sporting goods company pled guilty to defrauding more than 100 schools in 12 states on Tuesday, according to multiple reports.
Circle Systems Group CEO Alan Abeshaus and CFO Mitchell Kurlander admitted in court that they had forged competitors' prices, inflated invoices and overbilled schools for almost a decade, according to an Associated Press report.
Each pled guilty to conspiring to commit wire and mail fraud -- a crime that could have meant 20 years behind bars -- but the 81-year-old Abeshaus will likely avoid prison time while his 54-year-old son-in-law faces up to 51 months in jail as part of their plea deals.
In 2011, the two men were indicted after another former Circle Systems Group executive and two New Jersey school officials also pled guilty as part of the conspiracy.
The company sent a bill and a similar looking invoice to schools in order to recoup two payments for refurbishing athletic equipment (mainly football helmets and pads), which led to almost $1 million in earnings, according to the 2011 New York Times report.
Circle also sent forged price quotes from competing companies in order to secure the lowest bid and then overcharge schools for additional services, the AP reported. Additionally, the company issued fraudulent invoices to make up for money it had donated to school's athletic programs, according to The Morning Call.
As U.S. District Judge William Walls asked Kurlander in court, "So, you gave with one hand and took back with the other?" The former CFO responded: "Yes, your Honor."
Meanwhile, Circle Systems Group also presented $40,000 in gifts -- including computers, flat-screen TVs, NFL tickets and golf outings -- to school officials who facilitated deals with the company. Former Long Branch (N.J.) High athletic director Charles Ferrara Jr. and former Elizabeth (N.J.) High Hall of Fame coach Robert Firestone pled guilty to accepting bribes more than two years ago, the New York Times reported.
In all, more than 100 high schools from Delaware, Florida, Georgia, Maryland, Michigan, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee and Virginia fell victim to the scam that robbed them of anywhere between $1-2.5 million.
Abeshaus will repay $1 million and Kurlander will also pay an undisclosed amount of restitution to the affected schools, according to the reports.
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