Risk Management

Ex-NBC Finance Exec Pleads Guilty in Embezzlement Case

Along with his boss, the company's treasurer, James Walsh removed funds from a petty-cash safe.
Stephen TaubAugust 4, 2008

A former finance executive at NBC Universal has pleaded guilty to charges of scheming to steal over $800,000 from the company.

James Walsh, the former treasury manager of NBC Universal, was charged with one count of conspiracy to commit wire fraud and one count of wire fraud, according to Michael Garcia, the U. S. Attorney for the Southern District of New York.

Walsh and Victor Jung, the treasurer of NBC Universal, embezzled money by removing cash from a safe located in the company’s headquarters where petty cash was kept for use in NBC Universal’s and its subsidiary companies’ business, according to federal prosecutors.

Later, Jung set up a dummy company and caused three fraudulent wire transfers of NBC Universal or GE funds to be sent to bank accounts he set up in the name of the dummy company, according to Garcia. Walsh helped Jung start one of these fraudulent wires by providing the required approval for the wire, according to the attorney general. Jung pleaded guilty in May to one count of conspiracy to commit wire fraud and three counts of wire fraud. He has not yet been sentenced.

Walsh faces a maximum sentence on each count of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss resulting from the crime. He is scheduled to be sentenced on November 4.

The pair used the embezzled money to, among other things, pay off large balances on their credit cards and pay about $40,000 for the rental of a summer home in Southampton, N.Y., according to public documents. They also used the money to pay for a birthday party that Jung threw for Walsh in April 2005.

Walsh, whose responsibilities included reconciling NBC Universal’s bank accounts and accounting for NBC Universal’s cash balances, reported directly to Jung. As part of his duties, Jung was responsible for collection efforts and for oversight of the company’s bank accounts. He was also responsible for financial analyses and reporting to NBC Universal’s parent company, General Electric Capital.(NBC Universal is 80 percent owned by General Electric and 20 percent owned by Vivendi.)

In November 2005, without NBC Universal’s authorization, Jung set up a company called NBC Universal Media Productions, LLC. “At no time was this company a part of NBC Universal or GE’s portfolio of companies and subsidiary companies,” Garcia stated.

Through bank accounts he set up, Jung caused two wire transfers to be sent—one for about $575,000 in January 2006 and another for about $238,450 in April 2006—from an account held by GE to two different accounts of the LLC, according to federal prosecutors. Walsh was accused of assisting in the transfer of about $238,450 in April 2006.