Michael A. Stortini, the former managing member and part owner of the Frank Robino Companies, a Delaware real estate development company, was sentenced Aug. 18 by U.S. District Court Judge Richard G. Andrews to 24 months of imprisonment 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. In addition to the prison term, Andrews ordered Stortini to pay restitution, with interest, to the 401(k) plan beneficiaries, as well as $638,468 to the IRS.
According to facts disclosed at Stortini’s plea and sentencing hearings, when FRC encountered difficult financial times in 2009, Stortini misappropriated funds from the employees’ retirement plan to pay operating expenses associated with the company, as well as fund real estate projects with which FRC and Stortini were involved. Around the same time, Stortini took approximately $900,000 for himself from bank accounts linked to FRC and its projects - $500,000 of which he spent at casinos - and failed to pay nearly half a million dollars in payroll taxes to the IRS.
Andrews stated that he believed the two-year sentence was necessary to promote respect for the law and deter others from committing similar breaches of trust. Recalling an adage that he heard in law school, Andrews stated in imposing sentence: “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.”
Acting U.S. Attorney David C. Weiss praised the collaborative work of the agencies involved - the IRS criminal investigation division, U.S. 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 U.S. Attorney Shawn A. Weede. For further information, contact public information officer Kim Reeves at 302-573-6277, ext. 16287.