Can't Tell Embezzlers Without a Scorecard

     WHITE PLAINS, N.Y. (CN) - A Westchester County moving company and its owner claim in court that a former CFO embezzled $5.7 million, and has been indicted for it.
     Collins Brothers Moving Corp., of Larchmont, and its CEO Frank Webers seek punitive damages from people and companies involved in the scheme, which spanned 6½ years, according to the lawsuit in Westchester County Supreme Court.
     Among the defendants are an accounting firm, two banks and a credit card company that allegedly failed to take action to stop the scheme, and the ex-CFO's wife and three adult children, who allegedly refused requests to return the spoils, which included cash, cars, tuition payments and trips.
     The lead defendant, Gregg S. Pierleoni of New Fairfield, Conn., worked as CFO at Collins Brothers Moving for nearly 26 years before being fired in April 2013 "based on poor performance," according to the 76-page complaint.
     As CFO, Pierleoni signed company checks and performed bank reconciliations, which the complaint describes as "weaknesses in the internal controls of management, especially in the accounting department," which allowed the scheme to go undetected.
     Pierleoni allegedly shuffled money among Collins Brothers Moving and its subsidiaries' accounts, creating a slush fund from which he paid personal credit card and other bills.
     The complaint alleges professional negligence, aiding and abetting fraud, conversion and fraudulent concealment against several companies that provided services to Collins and turned a blind eye to Pierleoni's activities.
     According to the complaint, Collins' longtime accounting firm, Anchin Block & Anchin, of Manhattan, recognized there were no internal controls for the CFO position, but failed to offer a warning until it was too late.
     Afterward, according to the complaint, Anchin executives "admitted that they in fact had learned of wrongdoing and fraud being perpetrated by Mr. Pierleoni" through normal accounting reviews between 2008-09 and April 2013.
     Anchin was fired in October 2013. It is listed as a defendant, as are three partners and five CPAs at the firm.
     Another defendant, J.P. Morgan Chase, with which Collins had several banking accounts for itself and its subsidiaries, failed to alert owner Webers to chronic overdrafts in the accounts, according to the complaint, because Pierleoni had requested that he be the bank's prime contact.
     "Had he [Webers] been advised of the ongoing accounts being overdrawn, he would have fired Mr. Pierleoni and approximately $4 million would not have been embezzled by Mr. Pierleoni," the complaint states.
     Keeping him out of the loop also allowed Pierleoni's slush fund to remain hidden, Webers claims.
     According to the lawsuit, the slush fund was created when Pierleoni kept open an account that Chase was supposed to close in 2006, when the moving company decided to wind down a subsidiary involved in residential construction and rehabilitation. The account had been used to purchase land, equipment and construction materials.
     "Had Mr. Webers not been blocked on the emails showing when the account was overdrawn, the emails would have disclosed overdrafts on [the former construction/rehabilitation account]. He then would have realized the existence of the account used for embezzlement by Mr. Pierleoni," the complaint states.
     As CFO, Pierleoni also had access to a money market account at Capital One Bank that Collins maintained as a savings account "with customary deposits and withdrawals of approximately $6,000," according to the complaint.
     Starting in July 2012, Pierleoni began transferring money out of other Collins accounts into the money market account until $920,000 was there, which the complaint claims he used to pay off personal charges on American Express credit cards for himself and his wife, Joanne.
     The complaint claims that Capital One, also a defendant, admitted the account had been "red flagged" for suspicious activity but no one alerted Collins.
     Instead, "Capital One honored the payments made on the Collins Brothers' account to American Express," the complaint states. "Had they notified the customer of this activity, the fraud would have been avoided. Capital One acted in a manner to assist the perpetration of the fraud."
     American Express, too, is a defendant. The complaint claims the credit card company took payments from two Collins accounts to cover charges by the Pierleonis without making "any inquiry of Gregg Pierleoni or Joanne Pierleoni as to the legitimacy or propriety of the charges and using a third-party corporation's check to pay their personal charges."
     Joanne Pierleoni, also a defendant, conspired with her husband to defraud Collins and Webers with credit card purchases of items such as furs, jewelry, maid service, limousines and a $30,000 family vacation to Disney World, according to the complaint.
     She allegedly used the cards to pay some expenses of a franchised ice cream business in which she was a majority owner.
     Three of the Pierleonis' adult children are defendants, allegedly having received "goods and services purchased with stolen funds."
     These included a Volvo C70 convertible bought by Gregg Pierleoni and transferred to daughter Debra, the complaint states.
     The complaint claims that Debra, Christopher and Megan Pierleoni continued to take money and goods after their father was indicted by a federal grand jury "in an effort to hide assets and effectuate fraudulent and voidable transfers," which violated New York debtor and creditor law.
     The two-count indictment, handed up in January in White Plains, charged Gregg Pierleoni with mail fraud and wire fraud in connection with the Collins embezzlement. The indictment claimed Pierleoni stole the money "so that he could enjoy a lavish lifestyle," prosecutors said at the time.
     An affidavit filed by an FBI agent claims Pierleoni used the mails "to send checks to further the scheme." The embezzlement came to light when a new CFO took over at the moving company, according to the affidavit.
     Pierleoni faces up to 40 years in prison if convicted on both counts.
     Pierleoni could not be reached for comment Sunday.
     Plaintiffs also include Collins Brothers Industries, Collins Brothers Worldwide LLC and Collins Brothers National Corp. Frank Webers is suing individually and as the companies' chief executive.
     Representing them is John Bailly of Bailly and McMillan in White Plains.
     Among the defendants are three partners and five CPAs in the Anchin firm who are named individually: partners Phillip M. Ross, Christopher Kelly and Daniel Stieglitz, and CPAs Vera Krupnick, Riz Ann F. Diva, Bridget Kralik, Amy Berger and David Albrecht.