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

June 20, 2007

SUPERVISOR ADMITS TO EMBEZZLING OVER $1 MILLION FROM LARGE ORANGE COUNTY MERCEDES-BENZ DEALERSHIP

SANTA ANA, Calif. – A former supervisor at the Mercedes-Benz of Laguna Niguel automobile dealership pleaded guilty today to embezzling more than $1 million from the luxury car dealership.

David Delgado, 36, of Laguna Niguel, pleaded guilty before United States District Judge AliceMarie H. Stotler. As part of a plea agreement, Delgado pleaded guilty to a two-count criminal information charging him with wire fraud for bilking his former out of $1,053,970. The Mercedes-Benz dealership in Laguna Niguel is the second-largest such dealership in the United States with an inventory of more than 1,500 luxury automobiles.

Delgado was the supervisor of temporary employees at the dealership for more than seven years. His responsibilities included overseeing temporary workers and approving the hours they worked. By pleading guilty in court today, Delgado admitted that over a span of at least three years he used his long-held supervisory position at the dealership to create bogus time-sheets for temporary workers and then pocket at least half of the money.

Mercedes-Benz employed temporary workers to perform numerous tasks at the dealership, including washing cars and driving cars around the lot. The temporary workers were employees of one of two companies – Manpower, Inc. and Volt Management Corp – which assigned employees to work at the dealership. The dealership paid Manpower and Volt based upon invoices Manpower and Volt sent to the dealership for the hours reportedly worked by the temporary employees. Manpower and Volt would then pay the employees.

Delgado was the only employee at the dealership responsible for monitoring and approving the hours worked by temporary employees. For employees of Volt assigned to work at the dealership, Delgado completed and approved paper time-slips for each temporary worker, indicating the name of the employee and hours worked. For Manpower employees assigned to work at the dealership, each employee was required to call a toll-free telephone number and input their times into an automated time system over the telephone. Delgado then approved the time worked by Manpower employees by accessing a Manpower website.

Delgado’s criminal conduct started in 2004, when he was approached by a temporary employee who offered to give Delgado half of his paycheck if Delgado arranged to have the temporary employee remain on the payroll. Delgado agreed and the temporary employee stopped working at the Mercedes-Benz dealership. Instead of notifying Manpower or Mercedes-Benz that the temporary worker was no longer working, Delgado approved phony hour entries for the temporary worker. After the temporary worker was paid for these false hour entries, he gave half of his paycheck amount to Delgado.

Over the next few years, Delgado recruited additional temporary employees from both Manpower and Volt or created completely fictitious temporary employees. These temporary workers, if they existed, were paid for hundreds of hours that they did not work.

Delgado used the proceeds from the fraudulent scheme to make payments and purchases for his personal benefit, such as making mortgage payments on his home, making home repairs, paying bills and purchasing computers.

Delgado’s fraudulent conduct initially was discovered through an internal investigation at Mercedes-Benz of Laguna Niguel, which immediately referred the matter to the Federal Bureau of Investigation, which began an investigation resulting in today’s plea.

As a result of his guilty pleas, Delgado is required to pay full restitution to Mercedes-Benz of $1,053,970, of which approximately $100,000 has already been paid.

Delgado faces a maximum statutory sentence of 40 years in federal prison, although the plea agreement contemplates a sentence in the range of 2½ to 3 years in federal prison, an estimate that is not binding on Judge Stotler. Delgado is scheduled to be sentenced on September 7, 2007.

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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.