[CORRECTED] The former transportation director of SC Johnson & Son Inc. has been sentenced to eight years in prison for defrauding the company of millions of dollars in inflated transportation charges.
Federal prosecution of a scam targeting SC Johnson came closer to a conclusion on Wednesday with the sentencing of two former SC Johnson employees who were involved.
Milton Morris and Katherine Scheller were part of a scheme in which trucking contractors billed SC Johnson at inflated rates and then returned part of the money to Morris, then the company's transportation director, in the form of kickbacks. He bought gifts for Scheller, one of his employees. Morris was convicted of mail fraud and filing a false tax return. Scheller was convicted of making false statements to a postal inspector.
In 2008, a jury awarded SC Johnson $147 million in damages in its civil suit against Morris, Scheller, and two men who ran transportation companies that were part of the kickback scheme. A judge later upped that to $203.8 million.
This week, federal judge Charles Clevert sentenced Morris to eight years and one month in prison to be followed by three years of supervised release. Clevert sentenced Scheller to three years in prison to be followed by one year of supervised release. Morris remains responsible for $20 million in restitution payments to SC Johnson, with $5.4 million of responsibility shared with his co-defendants.
Morris had worked for the company for 46 years. Scheller was also a longtime employee and was set to succeed Morris when he retired. Both were fired in October 2004. The company started investigating the two in early 2004.
The men who set up the fraudulent transportation firms and paid the kickbacks to Morris also have pleaded guilty to federal crimes.
In a prepared statement, SC Johnson said it is pleased that justice was served with the sentencings of Morris and Scheller.
"These individuals admitted to their crimes in plea agreements signed in December 2008, in which they acknowledged their involvement in a scheme to defraud SC Johnson by submitting inflated invoices for transportation services. In delivering the sentences, Chief Judge Charles N. Clevert Jr. commented on the breaches of fiduciary responsibility and trust committed by these individuals.
"The company believes that justice has prevailed today and this sentence is a strong statement that fraud, greed and deceit have no place in our society. SC Johnson appreciates the work of the court, and we look forward to when all parties involved in this fraudulent scheme are held accountable for their acts."
CORRECTION: In a previous version of this story, Truckinginfo.com inadvertently reported outdated and incorrect information regarding All Modes Inc., David Eggleston and Bay Darnell. Eggleston bought the Wisconsin-based company from Darnell, and both were targeted in a civil suit by SC Johnson, accused of participating in the kickback scheme. In 2009, a jury exonerated the men. Neither was ever the subject of criminal charges relating to the kickback scheme. The editors of Truckinginfo.com apologize for the error.
Federal prosecution of a scam targeting SC Johnson came closer to a conclusion on Wednesday with the sentencing of two former SC Johnson employees who were involved.
Milton Morris and Katherine Scheller were part of a scheme in which trucking contractors billed SC Johnson at inflated rates and then returned part of the money to Morris, then the company's transportation director, in the form of kickbacks. He bought gifts for Scheller, one of his employees. Morris was convicted of mail fraud and filing a false tax return. Scheller was convicted of making false statements to a postal inspector.
In 2008, a jury awarded SC Johnson $147 million in damages in its civil suit against Morris, Scheller, and two men who ran transportation companies that were part of the kickback scheme. A judge later upped that to $203.8 million.
This week, federal judge Charles Clevert sentenced Morris to eight years and one month in prison to be followed by three years of supervised release. Clevert sentenced Scheller to three years in prison to be followed by one year of supervised release. Morris remains responsible for $20 million in restitution payments to SC Johnson, with $5.4 million of responsibility shared with his co-defendants.
Morris had worked for the company for 46 years. Scheller was also a longtime employee and was set to succeed Morris when he retired. Both were fired in October 2004. The company started investigating the two in early 2004.
The men who set up the fraudulent transportation firms and paid the kickbacks to Morris also have pleaded guilty to federal crimes.
In a prepared statement, SC Johnson said it is pleased that justice was served with the sentencings of Morris and Scheller.
"These individuals admitted to their crimes in plea agreements signed in December 2008, in which they acknowledged their involvement in a scheme to defraud SC Johnson by submitting inflated invoices for transportation services. In delivering the sentences, Chief Judge Charles N. Clevert Jr. commented on the breaches of fiduciary responsibility and trust committed by these individuals.
"The company believes that justice has prevailed today and this sentence is a strong statement that fraud, greed and deceit have no place in our society. SC Johnson appreciates the work of the court, and we look forward to when all parties involved in this fraudulent scheme are held accountable for their acts."
CORRECTION: In a previous version of this story, Truckinginfo.com inadvertently reported outdated and incorrect information regarding All Modes Inc., David Eggleston and Bay Darnell. Eggleston bought the Wisconsin-based company from Darnell, and both were targeted in a civil suit by SC Johnson, accused of participating in the kickback scheme. In 2009, a jury exonerated the men. Neither was ever the subject of criminal charges relating to the kickback scheme. The editors of Truckinginfo.com apologize for the error.
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