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Wife charged with joining him in theft of another $1.2 million

A Newtown, Pa., man was indicted Wednesday on charges that while serving as the CEO of two Burlington Township manufacturing companies owned by his wife’s extended family, he stole more than $2.3 million from the businesses through various schemes.

His wife was charged with conspiring with him in connection with over $1.2 million of the alleged thefts.

Michael Geiger, 51, also is charged with stealing $1.4 million from New Jersey’s unemployment insurance trust fund by implementing a “rolling layoff” program and instructing his employees to collect unemployment insurance benefits while still working by fraudulently underreporting their hours and wages.

State Criminal Justice Director Stephen J. Taylor said the 15-count indictment charges Geiger with first-degree conspiracy and various counts of first- and second-degree money laundering, second-degree theft, and second-degree misconduct by a corporate official.

Geiger was CEO of American Casein Company (“AMCO”) and American Custom Drying Company (“ACD”) from 2004, when he was hired by the late founder of the companies, his wife’s grandfather, until 2009, when he was removed after stockholders discovered suspicious expenditures.

His wife, Donna Geiger, 48, is named in nine counts charging the couple with first-degree conspiracy, first-degree money laundering, and various counts of second-degree theft and second-degree money laundering.

“As CEO, this defendant had a fiduciary duty to act honestly to advance the financial interests of these companies and their shareholders,” state Attorney General Paula T. Dow said. “Instead, he allegedly stole over $2.3 million from them, conspiring with his wife to use company funds to buy a Porsche and two vacation homes, among other things.”

“We have made prosecuting major financial crimes a priority,” Taylor said. “In these tough economic times, we stand ready to aggressively investigate and prosecute allegations of dishonest operators stealing from businesses, investors or consumers.”

On Aug. 30, Deputy Attorney General Valerie A. Noto took a guilty plea from a man who runs a company that supplied products to AMCO and AMC. Hugh Henley, 65, of Delray Beach, Fla., president of Prestige Technology Corporation of Boca Raton, Fla., pleaded guilty before state Superior Court Judge Pedro J. Jimenez Jr. in Trenton to second-degree money laundering for submitting false invoices to help Geiger misappropriate funds.

The state will recommend that Henley be sentenced to seven years in state prison and be ordered to pay a $250,000 anti-money laundering penalty.

AMCO specializes in products made from casein, which is a milk and cheese protein used to make foods, plastics, adhesives, paints and other goods. AMCO manufactures powdered protein ingredients for foods, beverages, cosmetics and personal care products. It also manufactures protein polymers for technical applications. ACD provides spray drying, blending, packaging and re-bagging services for the chemical and food industries. The companies bought most of the casein products they used in their operations from Prestige Technology.

The indictment alleges:

From 2005 through 2009, the Geigers stole $398,849 from AMCO and ACD by means of 70 unauthorized company checks and wire transfers which were made payable to Michael Geiger, or, in one instance, Donna Geiger.

From 2006 through 2009, the Greigers had AMCO and ACD pay a total of approximately $334,734 in bills for work performed by nine different contractors or vendors at their home in Newtown, including, among other things, home renovations, concrete work, electrical upgrades, landscaping, tree work and housekeeping.

That between 2006 and 2009, the Geigers used $75,005 in additional unauthorized checks from AMCO and ACD to purchase four vehicles for themselves: a Porsche, an MG, a GMC Yukon and a Volkswagon Jetta.

That in October 2008, at Michael Geiger’s direction, Henley generated four phony invoices from his company, Prestige Technology, each billing AMCO in the amount of $164,904. Although AMCO allegedly did not receive any products from Prestige for these invoices, Geiger allegedly had AMCO pay all four invoices. An amount equal to the total of those invoices, $659,616, was subsequently wired by Henley from Prestige to the bank account of DMG Automotive in October 2008. The investigation revealed that Geiger wanted to loan the money to his mother-in-law so that she could pay estate taxes on the estate of the founder of AMCO and ACD, which would help Geiger solidify his control of the companies.

The Geigers stole $221,186 from AMCO and ADC which they used to purchase a condominium in Fort Pierce, Fl. In October 2008 Michael Geiger directed Henley to wire $221,186 to the title company in Florida that was handling the real estate closing. The couple allegedly executed a false promissory note for Henley for that amount. Michael Geiger allegedly reimbursed Henley by having him submit phony invoices from Prestige to AMCO and ADC, which were paid by the companies in January 2009, even though the companies did not receive any products for the invoices.

Similarly, it is alleged that the following year, in October 2009, the Geigers stole $192,113 from AMCO and ADC which they used to buy a vacation home in Cape May. As in the prior home purchase, Michael Geiger allegedly directed Henley to wire the funds from Prestige to the title company handling the closing. The couple allegedly executed a false promissory note for Henley, and Michael Geiger had him submit false invoices from Prestige to AMCO and ADC to obtain reimbursement. The invoices were paid in December 2009.

It also alleged that in November 2009, a month before he was terminated as CEO, Michael Geiger had two checks issued to himself from AMCO and ACD for a total of $734,220 in severance pay. The maximum amount that Geiger was permitted to receive in severance pay from the two companies under his employment contract was $300,000. It is alleged that Geiger stole the remaining $434,220 in unauthorized severance pay.

In addition to the alleged money laundering and thefts from AMCO and ACD, the indictment charges Geiger with stealing $1.4 million in unemployment insurance benefits by directing employees to underreport their hours and wages in applications to the state Department of Labor so they could collect unemployment benefits.

In November 2008, Geiger implemented a rolling layoff program in which employees were laid off for one week per month. From that time until his termination in December 2009, Geiger allegedly directed employees to supplement their wages by filing fraudulent unemployment applications, which resulted in them receiving about $1.4 million in benefits to which they were not entitled.

After Geiger was fired, the two companies reached a financial settlement with the Department of Labor to resolve the violations.

First-degree crimes carry a maximum sentence of 20 years in state prison and a criminal fine of up to $200,000, while second-degree crimes carry a maximum sentence of 10 years in state prison and a criminal fine of $150,000. The money laundering counts carry an enhanced fine of up to $500,000, plus an additional anti-money laundering profiteering penalty of $500,000 for the first-degree counts and $250,000 for the second degree counts.