Risk Management

Former EDS CFO Headed to Prison

Diverted payments, money laundering cited by judge.
Stephen TaubNovember 22, 2006

Another finance executive is headed to prison. Joseph Amato, the former chief financial officer of Electronic Data Systems’ Global Securities Industry Group was sentenced to one year and one day in prison for the role he played in a scheme to defraud EDS out of millions of dollars, according to the Associated Press.

John Fasciana, an attorney and certified public accountant, was sentenced to two years in prison for his involvement in the scheme, according to the report. The pair were convicted in July 2005 after an 11-week trial. An earlier court hearing ended in a mistrial in December 2002.

At the time of their convictions, United States District Judge Laura Taylow Swain noted in a press release that the trial’s evidence showed that Amato and Fasciana helped fellow defendant and head of GSIG, Michael Reddy—deceased when the pair was convicted—and others to steal hundreds of thousands of dollars from EDS through a money laundering operation. The scheme, according to the statement, diverted checks sent to EDS to Fasciana’s attorney’s trust account.

As part of the scheme, Amato and Fasciana helped Reddy falsify and alter GSIG’s books and records to make it appear that GSIG had met various revenue and profit targets, according to the judge’s statement. By engaging in the falsifications and alterations, Reddy and others reaped millions of dollars in bonuses under EDS’s incentive compensation agreement plan, according to the judge’s announcement, citing the evidence.

Amato made more than $70,000 from the check-stealing and bonus compensation scheme while Fasciana made more than $350,000.