Sports Equipment Company Execs Arrested For Defrauding Schools In 11 States

Ah, the free market is a wondrous thing!

The CEO and chief financial officer of the former Circle System Group were charged today in federal court in New Jersey for allegedly double billing schools almost $1 million, as well as submitting fake price quotes to win athletic equipment bids and showering school officials with gifts for which the company later billed the schools.

CEO Alan Abeshaus, 79, a former Palmer Township resident who now lives in Highland Beach, Fla., and Chief Financial Officer Mitchell Kurlander, 52, of South Whitehall Township, who is Abeshaus’ son-in-law, both were indicted by the U.S. Attorney of the District of New Jersey with one count of mail and wire fraud conspiracy. Kurlander also is charged with nine substantive counts of mail fraud and 12 substantive counts of wire fraud.

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In New Jersey, Abeshaus and Kurlander are accused of double billing schools of more than $970,000. According to the indictment, the company submitted invoices and statements to schools that were similar in form and appearance. As a result, schools often paid both the invoices and statements, according to the indictment.

Kurlander is accused of instructing Circle employees to deposit the duplicate charges into the company’s account, which he tracked in a secret bookkeeping account that only he could access. Kurlander allegedly paid $822,000 of this money in special bonuses to Abeshaus.

Kurlander and Abeshaus also are accused of directing the company’s sales staff to provide multiple price quotes, including some that appeared to come from other companies, to allow schools with requirements to obtain multiple price quotes to justify a contract with Circle System. Using quote forms with the letterhead of other companies, Circle System employees would prepare fake, higher quotes at the direction of Kurlander and others, according to the indictment.

Circle submitted hundreds of such fake quotes to at least 100 different schools, including more than 60 public schools in New Jersey and schools in approximately 11 other states, according to the indictment.

Here in NYC, we just call this kind of thing "outside consulting".

But in other states it's actually illegal to double bill or bill for services not rendered.

Who knew?

Certainly not Mayor Bloomberg.

CityTime.

Willard Lanham.

John Haggerty.

ARIS.

And the list goes on and on (and will so long as Comptroller Liu audits the Bloomberg contracts.)