The former vice president of Richmond-based MGT Construction was sentenced today to 27 months in prison for his role in a corporate accounting scheme that concealed millions of dollars in debt owed by the company.
Patrick Lindsey “served an integral role” in a scheme designed to conceal the fact that MGT Construction was more than $20 million in debt,” said Raj Parekh, acting U.S. Attorney for the Eastern District of Virginia.
“That deceit not only maintained the defendant’s job and padded his annual compensation package, but it also proved devastating to the individuals who worked on MGT Construction projects and were left holding the bag after the fraud scheme was uncovered and the company subsequently collapsed. This office is committed to working with our law enforcement partners to combat corporate malfeasance and hold accountable executives who manipulate others for personal gain,” Parekh said.
According to court documents, Lindsey, 43, of Midlothian, was the vice president of preconstruction services at MGT Construction, a Richmond-based company offering preconstruction planning and construction management services.
From 2011 through November 2016, MGT Construction, according to prosecutors, engaged in a fraudulent accounting scheme that sought to conceal MGT’s true financial position through job-cost manipulations within the company’s accounting software system.
Lindsey had primary day-to-day management of the accounting scheme, which involved the regular movement of job-cost invoices from nearly finished projects to more recent construction projects. This cost-shifting falsely inflated profit margins and concealed losses, which generated a wholly inaccurate picture of MGT’s profitability.
MGT and its parent company submitted the products of these fraudulent accounting manipulations as part of MGT’s application packages to banks and insurance companies for lines of credit and bonding coverage.
During the conspiracy, Lindsey moved or deleted thousands of job cost invoices, concealing the fact that, by the time the scheme was uncovered in November 2016, MGT Construction was more than $20 million in debt.
When the accounting fraud was exposed, MGT Construction owed millions of dollars in outstanding invoices that it could not pay to dozens of contractors, subcontractors and vendors who had provided their services or products to MGT Construction.
MGT filed for Chapter 7 bankruptcy in early 2018.
Share
AFP
