“K” Line manager guilty of embezzling

“K” Line manager guilty of embezzling

“K” Line manager guilty of embezzling

   A former “K” Line America manager pleaded guilty on Wednesday to mail fraud arising from a scheme to embezzle more than $370,000 from his employer.
   The guilty plea was announced by U.S. Attorney for the District of Maryland and the FBI.
   Timothy C. Kany Sr., 49, of Bel Air, Md., was manager of “K” Line's Baltimore office from 2000 to Aug. 13, 2009, where he oversaw the office's daily business and approved invoices submitted by vendors for payment.
   In late 2000, Kany began embezzling funds from “K” Line through a scheme in which he created two entities, Pawl's Port Services and Bayview Ship Service, which existed in name only. Kany approved invoices that sought payment from “K” Line for services purportedly provided by Pawl's and Bayview. “K” Line paid the fraudulent invoices and mailed checks to the companies at post office boxes in Bel Air and Abingdon, Md., which Kany controlled. Kany or another individual retrieved the checks and deposited them into bank accounts set up for the entities.
   From 2000 to 2009, Kany submitted more than 1,400 fraudulent Pawl's Port and Bayview invoices to “K” Line for payment, embezzling a total of $270,488.25 in “K” Line corporate funds, which he used for his personal benefit.
   In 2003, a “K” Line employee, Kriste Lynn Ferrell became Kany's administrative assistant. Ferrell's duties included submitting vendor invoices to “K” Line's corporate offices for payment. Ferrell discovered Kany's embezzlement scheme and Kany offered to instruct Ferrell on how to set up a similar scheme for her own benefit.
   Ferrell created Chesapeake Cargo Services, an entity that existed in name only. Through August 2009, Ferrell and Kany conspired to submit for payment fraudulent Chesapeake Cargo invoices, in place of legitimate invoices received from a vendor that provided actual services to “K” Line. The fraudulent invoices submitted to “K” Line for payment inflated the cost of the services provided by the legitimate company. Ferrell and Kany submitted about 620 false invoices to “K” Line claiming $225,921.35 in services rendered. Once “K” Line paid the inflated Chesapeake Cargo invoice and mailed a check to a post office box under Ferrell's control, Ferrell deposited the embezzled “K” Line funds into Chesapeake Cargo's bank account, paid the vendor and kept the difference for herself and Kany, which totaled $100,894.95. Ferrell used the embezzled funds to make personal purchases for herself and to make cash payments to Kany.
   Kany faces a maximum sentence of 20 years in prison followed by three years of supervised release. U.S. District Judge Benson Everett Legg scheduled sentencing for Feb. 4, 2011. As part of his plea agreement, Kany will be required to pay restitution of $371,383.21 the amount embezzled as a result of these schemes.
   Ferrell, 38, also of Bel Air, pleaded guilty on Oct. 29, to mail fraud conspiracy and is scheduled to be sentenced on March 17.