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In SDNY Kabbaj Gets 51 Month Deal For $6M Fraud Compared to 262 Months for Heroin Conspiracy

By Matthew Russell Lee, Patreon
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SDNY COURTHOUSE, Jan 3 –  Among arraignments and guilty pleas for heroin conspiracy, on January 3 in Magistrates Court of the U.S. District Court for the Southern District of New York there was a higher profile, or at least higher dollar value, guilty plea. 

After the plea, which Inner City Press witness, the US Attorney's Office announced that "Hicham Kabbaj, a former senior manager in Manhattan for a global internet company (“Company-1”), pled guilty before United States Magistrate Judge Stewart D. Aaron to one count of wire fraud."

IRS-CI Special Agent in Charge Jonathan D. Larsen said:  “Today, Mr. Kabbaj pled guilty to a serious felony because he chose to misuse his position of trust as a corporate executive to steal company funds for his own personal gain.  As a result of the dedicated work of IRS-CI special agents, along with our partners at the U.S. Attorney’s Office, Mr. Kabbaj will face the consequences of his crime when he is sentenced by a federal judge.”    

There was a plea agreement, putting the sentencing guideline at 51 to 63 months. For a $6 million fraud, 51 months. For a heroin conspiracy, with a plea agreement the same morning, 262 months.    

According to allegations in the Information and other documents filed in federal court, as well as statements made in public court proceedings:     From at least August 2015 until at least May 2019, KABBAJ engaged in a scheme to defraud his employer into paying a vendor named Interactive Systems, a KABBAJ-controlled shell company, for various information technology (“IT”) products and services.  As part of the scheme, KABBAJ caused Interactive Systems to send invoices to Company-1 claiming that Interactive Systems performed services and purchased firewalls and servers for Company-1.  In reality, Interactive Systems did none of that work, and KABBAJ quickly transferred the money that Company-1 paid to Interactive Systems to his own personal bank accounts.  In total, KABBAJ defrauded Company-1 of more than $6 million as a result of the scheme.     

The case is US v. Kabbaj, 19-mj-8116 (Aaron). 


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