 |
UNITED STATES ATTORNEY ALEXANDRIA NEWPORT NEWS NORFOLK RICHMOND CHUCK ROSENBERG UNITED STATES ATTORNEY |
FOR IMMEDIATE RELEASE:
|
June 8, 2007 |
Former Controller for Packaging Corporation of America Sentenced
( Richmond, Virginia) – Richard E. Davis, age 63, of Richmond, Virginia, was sentenced today before United States District Senior Judge Robert E. Payne, to 48 months in prison, and ordered to pay restitution in the amount of $2,500,000, after pleading guilty to Mail Fraud. Chuck Rosenberg, United States Attorney for the Eastern District of Virginia; and Charlie Cunningham, Special Agent in Charge, Federal Bureau of Investigation, Richmond Resident Office, announced the conviction.
Richard E. “Dick” Davis was Controller for the Packaging Corporation of America (PCA), Richmond Corrugated Products Plant, based in Richmond. In that role, Davis served as the Chief Accountant for the plant, which required him to review and approve payment for all vendor invoices. According to court documents, during the period of 1997-2005, Davis, in his role as Controller, personally processed and approved approximately 98% of the invoices submitted by Building Services Inc. (BSI), a janitorial service operated by Davis and owned by his wife, which provided janitorial services to PCA. Davis did not disclose this relationship or submit BSI as a minority vendor in accord with company policy.
During the period of 1997-2005, Davis caused over 100 PCA checks to be generated and mailed to BSI, corresponding to over 400 invoice amounts totaling over $1,400,000. There were no invoices located in any PCA files corresponding to the invoice amounts. Additional misappropriations of over $600,000 from inflated billings and payments were made with no support to BSI. For 2005, the total expenditures for janitorial services at the Richmond PCA plant were approximately $8,000 per employee, while for other PCA plants using outside janitorial services, the average amount spent for janitorial services was $257 per employee.
Acting on behalf of BSI, Davis caused further misappropriation of over $100,000 in PCA funds between 2000 and 2005 by generating checks payable to vendors Jefferson Supply and Rutherford Supply for cleaning items and other supplies that should have been provided by BSI as part of their janitorial services performed.
Between 1999 and 2004, Davis misappropriated PCA funds for his personal enrichment by causing the issuance of PCA checks to Virginia Paint Company, Richmond, Virginia, totaling over $50,000. During his employ at PCA, Davis altered Virginia Paint Company invoices to avoid detection of the fact that he was using PCA funds to purchase paint and other personal items for his primary residence in Richmond and his Virginia Beach condominium.
Between 2000 and 2005, Davis misappropriated PCA funds for his personal enrichment by using PCA checks to purchase over $100,000 in Sams Club Direct Cards, which Davis used either as gift cards for friends and family or for the purchase of personal items.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Brian L. Whisler prosecuted the case on behalf of the United States.