Michael A. Stortini, former managing member and part owner of the Frank Robino Companies was sentenced Monday by United States District Court Judge Richard G. Andrews to 24 months in prison for embezzling $606,500 in retirement savings from his employees’ 401(k) plan, as well as failing to pay hundreds of thousands of dollars in payroll taxes to the Internal Revenue Service.
Prosecutors said funds went to aid a company in financial trouble as well as for personal uses that included dropping half a million dollars at casinos. Robino Compaies, during much of its history, was one of the state’s largest home builders. Stortini had earlier entered a guilty plea.
According to information in Stortini’s plea and sentencing hearings, when FRC encountered financial problems in 2009, Stortini took funds from the employees’ retirement plan to pay operating expenses associated with the company, as well as fund real estate projects where Robino Companies and Stortini were involved.
At about the same time, Stortini took about $900,000 for himself from bank accounts linked to Robino Companies and its projects – $500,000 of which he spent at casinos . He also ailed to pay nearly half a million dollars in payroll taxes to the IRS.
According to prosecutors, Andrews recalled an adage that he heard in law school, that “when you have a fiduciary relationship for money like that, your money is white, the money you control is black. And if you mix the two of them together, you’re going to be wearing black and white stripes.”
Separately in May of this year, The US Department of Labor filed suit alleging that between May 2009 through August 2009, Stortini transferred all the assets from the plan’s account at Charles Schwab to an account in the name of Robino-Stortini Holding Company, which was also held at Charles Schwab, a brokerage firm.
According to the Labor Department, the holding company is now defunct and participants in the plan are unable to obtain their benefit payments.
Acting United States Attorney David C. Weiss praised the collaborative work of the agencies involved –the IRS Criminal Investigation division, United States Department of Labor, and Employee Benefits Security Administration – and highlighted the investigation as an “example of our commitment to find individuals who criminally exploit positions of trust within our community and bring them to justice.”
“It is a serious crime when employers abuse their fiduciary responsibilities to their employees by lining their pockets with tax dollars intended to protect their employees’ futures,” said Akeia Conner, Special Agent in Charge, IRS Criminal Investigation. “Mr. Stortini’s actions not only caused negative ramifications to those financially connected to him, but also to the honest taxpayer who suffers from the stress to the tax system that Mr. Stortini’s actions caused. Tax crimes have erroneously been referred to as victimless, but that position could not be more wrong since we all end up paying when someone attempts to evade our tax system.”
The case was prosecuted by Assistant United States Attorney Shawn A. Weede
