Latest Legal News from the Criminal Courts of Los Angeles, California and the U.S.

June 14, 2007

FORMER SENIOR VICE PRESIDENT AT NEWPORT BEACH ENTERTAINMENT SOFTWARE COMPANY PLEADS GUILTY TO EMBEZZLEMENT

A former Senior Vice President of Information Technology and Operations at Crave Entertainment, Inc., pleaded guilty today to bilking the entertainment software company out of approximately $297,531.

Christian Chatterjee, 39, of Laguna Hills, pleaded guilty today before United States District Judge David O. Carter, in Santa Ana. Chatterjee pleaded guilty to a two-count criminal information charging him with mail fraud for embezzling funds from his employer. As part of his plea agreement, Chatterjee forfeited all of the money he fraudulently obtained, as well as numerous entertainment software products in his possession, including Sony PlayStation®2 consoles and games.

Crave Entertainment, headquartered in Newport Beach, is in the business of distributing video games and video game bundles to retailers across the United States. Crave is a leader in the world’s interactive entertainment software industry, publishing video game entertainment products for every major gaming platform on the market, including Sony PlayStation®, PlayStation®2, Nintendo Wii™, Game Boy® Advance, Nintendo GameCube™, and the Xbox 360™ video game and entertainment system from Microsoft. Crave Entertainment is a division of Handleman Corporation, which acquired the company in 2005.

During the embezzlement scheme, Chatterjee served as the Senior Vice President of Information Technology and Operations at Crave Entertainment. In that position, he was responsible for the computer systems and the shipping system used to distribute products to retailers.

In a plea agreement filed with the court, Chatterjee admitted that throughout 2006, he engaged in a scheme to embezzle money from Crave Entertainment and thus deprive the software company of its right to his honest services as its employee. As part of the scheme, Chatterjee created numerous phony invoices, supposedly from companies named “XI Services” and “Tech Ed.” The phony invoices requested payment from Crave Entertainment for various products and services, such as the Xbox 360™ and other video game products. In reality, “XI Services” and “Tech Ed” were companies defendant concocted. These phony companies did not provide any goods or services to Crave Entertainment and were not owed any money.

Nevertheless, Chatterjee used his signing authority in his position at Crave Entertainment to approve the phony invoices he created. After approving payments of the invoices, Chatterjee caused the payments to be mailed to mail forwarding companies in Canada, which then forwarded the payments to his home in Laguna Hills, California. Chatterjee then deposited the payments into his bank accounts.

Chatterjee’s fraudulent conduct initially was discovered through an internal investigation at Crave Entertainment, which referred the matter to the Federal Bureau of Investigation, which began an investigation resulting in today’s plea.

On February 7, 2007, Chatterjee voluntarily met with the Federal Bureau of Investigation and admitted to the criminal embezzlement scheme. He thereafter surrendered to the FBI $297,531, which comprised the amount of money he had embezzled from the company. Chatterjee also forfeited to the FBI several entertainment software products in his possession, including 11 Sony PlayStation®2 game consoles, 48 PlayStation®2 games, and 5 PlayStation®2 game bundles. Under the plea agreement, the funds and merchandise that Chatterjee already has surrendered to the FBI will automatically be used to pay the restitution to Crave Entertainment. Chatterjee faces a maximum statutory sentence of 40 years in federal prison, five years of supervised release, and a fine of $500,000. However, the plea agreement contemplates a sentence of three years probation, a $4,000 fine, and the aforementioned full restitution payment, if Chatterjee continues to cooperate and does not breach the agreement. Chatterjee is expected to be sentenced before Judge Carter on October 1, 2007.

This case is a result of an investigation by the Federal Bureau of Investigation. Crave Entertainment referred the matter to the FBI and fully cooperated in the investigation.

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CALIFORNIA CRIMINAL DEFENSE LAWYER

JOSEPH SHEMARIA

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Latest Legal News from the Criminal Courts of Los Angeles, California and the U.S.