Hauppauge, N.Y. (Aug. 1, 2003) -- The FBI swooped down on Long Island-based accounting software and business development company AccountantsWorld and arrested two workers for allegedly trying to sell its customer list to rival company ExacTax -- just days after AccountantsWorld sold its tax product to Creative Solutions for $20 million.
A third person was arrested at a Holiday Inn in Ronkonkoma, Long Island, when he showed up with a CD-ROM and an inch-thick list of spreadsheets containing the company's Tax Relief customer list. He was hoping for a $40,000 payout, but instead walked into an FBI sting.
An FBI complaint said that those arrested included 39-year-old customer service representative Kristin Froelich, the alleged ringleader; Frank Walsh, a 39-year-old service representative; and Gerard Germano, 42, an unemployed Ronkonkoma man who showed up to collect the money at the Holiday Inn.
"Obviously it's very disappointing," said AccountantsWorld chief executive Chandra Bhansali. "This is shocking for the whole company."
The FBI complaint said Froelich initiated the fraud with an anonymous e-mail sent from a Yahoo account to a sales representative at ExacTax on July 17, less than a week after AccountantsWorld sold Tax Relief to CSI.
"The person offers to sell an unidentified customer list and doesn't say where it's coming from, but the e-mail address is firstname.lastname@example.org," the complaint noted.
The sales rep at Anaheim, Calif.-based ExacTax notified Creative Solutions about the offer and CSI contacted the FBI, which set up the sting. Under the FBI's direction, the ExacTax rep continued to correspond with the seller, agreeing to buy the list for $40,000, and setting up July 31 as the date for the exchange at the Holiday Inn.
By this time, the FBI had traced the IP addresses from the different e-mails sent to ExacTax to Froelich's and Walsh's workstations at AccountantsWorld and closed in for the arrest.
All three were arrested Thursday afternoon and charged with wire fraud, which could land them up to 20 years in prison.
The complaint does not indicate how much AccountantsWorld knew about the sting before the arrests.
-- Tracey Miller-Segarra
Register or login for access to this item and much more
All Accounting Today content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access