The former chief executive officer and chief financial officer of a sports-equipment-reconditioning company pleaded guilty Tuesday to defrauding schools in 12 states to the tune of nearly $1 million.
Mitchell Kurlander and Alan Abeshaus, the former CFO and CEO of the Easton, Pa.-based Circle System Group, respectively, pleaded guilty to conspiracy for allegedly tricking schools into paying invoices twice, creating fake price quotes from competitors, and submitting fraudulent invoices to schools, among other things.
The two were originally charged with conspiracy in federal court back in May 2011. The indictment accused Kurlander and Abeshaus of “obtaining money and other things of value” from schools “by means of a number of fraudulent business practices.”
The Circle System Group allegedly sent both invoices and monthly statements to schools that “were strikingly similar in form and appearance,” which caused some schools to pay for the same services twice. Over the 10-year span, the group received more than 500 duplicate payments, according to the indictment, totaling more than $970,000.
Kurlander and Abeshaus were also accused of creating fake price quotes from other companies to convince school systems to obtain their services instead. The group also allegedly submitted fraudulent invoices to schools for new equipment purchases and reconditioning services that either misrepresented the product or service provided, inflated the amount of the invoice, or both.
A large portion of the company’s business was conducted with New Jersey schools, but prosecutors say the scheme spread to schools in Delaware, Florida, Georgia, Maryland, Michigan, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, and Virginia, according to the Associated Press. School districts in Pennsylvania and New Jersey alone spent more than $1.2 million with the organization from July 2003 through 2008, according to an investigation by
A version of this news article first appeared in the Schooled in Sports blog.