Former Controller of Blaine Company Sentenced for Embezzling $1.2M to Fund Classic Car Hobby
John Robinson, a more than decade-long employee of Blaine-based North Central Stamping and Manufacturing Inc., received a nearly two-year prison sentence last week for pocketing roughly $1.2 million from his place of work.
Court documents indicate the scheme was fairly straightforward: Sometime around 2009, which was six years after he became controller at NCSMI, Robinson set up a bank account—disguised as a company account—and directed NCSMI's customers to make payments there.
It's unclear how much he directed back to the company, but in one year (2015) he pocketed $188,417.25 for himself, documents indicate. His income tax filing that year told a different story, as he reported income of $41,792, which he later admitted was to avoid additional taxes and any questions about his illicit gains. He kept the scheme going for 9 years.
“Throughout the 9 year duration of the fraud, the Defendant was repeatedly asked by NCSMI's Management to explain the surprising financial difficulties the company was suffering,” the US Attorney's office stated in their sentencing memorandum to the court. “Rather than coming clean about his fraud and the debilitating impact it was having on NCSMI, he repeatedly concealed them falsely blaming the company's struggles on mismanagement and efficiencies.”
Robinson, 50, of Crystal, used the money to cover his personal expenses and fund his habit of buying, restoring and selling classic automobiles, according to court documents. His hobby grew to the point where he also used company funds to rent a storage facility when he kept his car collection and car parts, the documents indicate.
When NCSMI initially confronted Robinson about the scheme, he attempted to liquidate his bank account, court documents show, but he did eventually cooperate with investigators, giving back company stock and selling cars and parts to help repay $650,000.
On August 17, Robinson pled guilty, for one count of mail fraud he used to conduct the scheme, and for one count of filing a false tax return. On Nov. 30, when considering that plea, Senior Judge Paul A. Magnuson in the U.S. District Court in St. Paul sentenced him to 33 months in prison, followed by three years of supervised release.
Court documents indicate that Robinson doesn't own his classic cars anymore, as he's sold all of them, but he still faces a large debt. Per the judge’s order, Robinson will have to pay NCSMI about $625,000 in restitution in the form of $200 monthly installments once he is released from prison.
“This is an appropriate sentence for a defendant who abused his long-held position of trust by stealing more than a million dollars from his employer to fund his preoccupation with classic automobiles,” said Assistant U.S. Attorney Surya Saxena. “I am grateful for the combined efforts of the investigative agencies whose work brought this case to a successful conclusion.”
The case was handled by the Criminal Investigation Division of the IRS, the Minnesota Department of Commerce Fraud Bureau and the Blaine Police Department.