The former CEO of Latex International in Shelton has pleaded guilty to charges related to the embezzlement of $1.7 million, according to a press release issued Monday by federal prosecutors.
Kevin Coleman, 51, of Waseca, Minn. pleaded guilty to one count of wire fraud and one count of tax evasion before U.S. District Judge Stefan Underhill in Bridgeport Monday.
Federal prosecutors said Coleman used corporate credit cards and accounts to pay for personal expenses such as jewelry, a Mercedes, and two Harley Davidson motorcycles.
The jewelry included a $50,000 pair of earrings, and an $8,000 Rolex watch.
Federal prosecutors, in the press release, said the scheme went on from October 2008 to December 2010.
A second former employee — Joanne Osmolik — has already pleaded guilty to one count of wire fraud in connection to the scheme. Federal prosecutors say Osmolik embezzled $1.5 million through credit cards and fake expense reports.
Osmolik was the vice president for human resources at Latex International.
Osmolik allegedly purchased six motorcycles, two ATVs, four snowmobiles, and several pieces of furniture with the money she embezzled.
She also allegedly bought three pieces of property in Vermont — including one only nine miles away from Okemo Mountain Resort in Ludlow.
Osmolik is scheduled to be sentenced on March 9.
Coleman, who is scheduled to be sentenced on May 4, faces up to 25 years in prison and a $3.5 million fine.
Prosecutors said Coleman instructed Osmolik to destroy company records so as to conceal their fraudulent nature from others at Latex International. Osmolik carried out those instructions and destroyed the records.
Coleman failed to file federal income tax returns for the 2007 though 2010 tax years, the press release said. During these four years, in addition to his embezzled income, Coleman earned a total $1,585,128 in wages from Latex International, resulting in a tax loss to the government of $741,029.
“Latex International is pleased that federal authorities are prosecuting this matter and that mandatory federal restitution laws will assist the company to recover at least some of the embezzled funds,” the company’s new CEO Dave Fisher said in a written statement Tuesday. “Coleman’s guilty plea today demonstrates that he betrayed his obligations to the company, its employees and stakeholders.”
The statement is posted at the end of this article.
Fisher, in the statement, said the company discovered the embezzlement and turned over the investigation to the FBI.
He thanked the U.S. Attorney’s office, the FBI and the Internal Revenue Service for their work on the case.
“This sad chapter in our company’s history is now formally behind us,” Fisher wrote in the statement.
