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Ex-CFO Michael Spada admits to $6.3M scam
An East Norriton man accused of embezzling $6.3 million from his former employer pleaded guilty Thursday to wire fraud, bank fraud, filing a false tax return and making a false statement to the federal government.
Michael G. Spada, 50, was charged earlier this month with stealing from Scannapieco Development Corporation, in New Hope, and hiding the fraud from a bank and the Internal Revenue Service (IRS) that extended him a $3.2 million line of credit, according to the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
Sentencing in the case is scheduled for June 21. Spada faces a maximum possible sentence of 60 years imprisonment, a $1.7 million fine, three years’ supervised release. He could also be ordered to pay $6.3 million in restitution and forfeit proceeds from his crimes, which includes his home in East Norriton and a New Jersey beach house.
Before his arrest, he was controller and chief financial officer of the Bucks County-based firm and the company’s other real estate and management companies.
Spada embezzled the funds by diverting company checks to his own account and took more than $400,000 in unauthorized salary between 2000 and 2009, according to authorities. He then failed to report most of the stolen money on tax returns and lied to IRS agents about this last June, reports indicate.
Scannapieco Development Corporation and its other companies had accounts at Bank of America, the successor to Summit Bank and Fleet Bank.
Spada had one individual, identified as “T.S.” in court papers, sign checks under false pretenses.
One SDC company, Headquarters Hotel Associates, owned the Sheraton Atlantic City Convention Center Hotel that had a mortgage with Bank of America. From 2000 to 2004, the East Norriton executive gave 56 checks to T.S. to sign, some in amounts as much as $100,000, purportedly to pay the hotel complex’s mortgage. Instead, Spada put the money in his own personal account at the bank.
The defendant used most of the embezzled money to fund a multi-million dollar brokerage account, and he spent $2.7 million on an ocean front home in Brigantine, N.J., according to federal prosecutors. The shore residence has an estimated value of $4.2 million.
Spada was employed with the company since the 1980s. He is married and has three adult daughters.
Assistant U.S. Attorney Mark B. Dubnoff prosecuted the case. The East Norriton man is being defended by Thomas Ostrander.
Filed under: Mortgage Fraud, Philadelphia, Scannapieco Development Corporation
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