Former Manhattan Executive Admits Wire Fraud
KSAL Staff - Fri 03:11 PM 08/10/2012
A former executive of a Manhattan high tech company admits to wire fraud.
According to U.S. Attorney Barry Grissom's office, 42-year-old Aaron Madison pleaded guilty to one count of wire fraud.
Madison was the chief operating officer of NanoScale Corporation. NanoScale is a privately held company that contracted to perform work for the U.S. Department of Defense and the U.S. Department of Health and Human Services. Together, those contracts accounted for approximately 90 percent of NanoScale’s business.
In his plea, Madison admitted that he committed the crime at a time when NanoScale was in financial distress.
At times, NanoScale’s accounts payable exceeded cash flow and the company was having difficulty meeting payroll.
From January 2009 to April 25, 2011, Madison attempted to meet NanoScale’s cash flow requirements and keep the company in business by defrauding the U.S. government. He created false invoices and used cash from government contracts to meet the company’s expenses including monthly payroll. He caused interstate electronic transfer of false invoices to the Department of Defense and the Department of Health and Human Services.
Sentencing is set for November 13th. Madison faces a maximum penalty 20 years in federal prison and a fine up to $250,000.