David Newmark, the former chief financial officer for Columbus Hill Capital Management, has been sentenced to 54 months in prison for embezzling $10,442,379.90 from his former employer. Newmark, a resident of Montville, New Jersey, plead guilty and was convicted of one count of wire fraud and one count of tax evasion.
The illegal activity took place between approximately February 2008 and March 2011, during which Newmark stole the money by writing letters requesting wire transfers and checks payable into a fraudulent bank account in his name. He requested the payments from the firms that were guarding Columbus Hill's accounts.
The U.S. Attorney's report highlighted several instances of Newmark's activities in which he requested two checks and eight wire transfers, all with amounts of six figures and above. In some instances, Newmark claimed the funds were being paid out in order to reimburse the company for some of its expenses.
The tax evasion charge stemmed from Newmark failing to disclose approximately $2,892,689 in income taxes to the Internal Revenue Service. According to NorthJersey.com, the U.S. Attorney's office claims $1,012,441 was lost in taxes due to Newmark's theft. The U.S. has recovered approximately $1.6 million in restitution paid by Newmark since he was found guilty.
"David Newmark admitted stealing from his own management company, creating a phony account to collect more than $10 million in fraudulent deposits," said U.S. Attorney Paul Fishman, according to NJ.com. "Making personal use of company cash, it was only a matter of time before he was caught with his hand in the piggy bank."
Newmark's attorney, Michael Himmel, has said that his gambling addiction is what drove him to commit the theft. He was particularly involved in betting on any kind of sport, said Himmel.