Eden Prairie Man Indicted for Embezzling Millions of Dollars from His Long-Time Employer
| U.S. Attorney’s Office August 07, 2013 |
MINNEAPOLIS—A federal indictment unsealed earlier today charges a 56-year-old Eden Prairie man with embezzling millions of dollars from his long-time employer. The indictment, which was filed on August 5, 2013, charges John Joseph Waters, Jr., with four counts of mail fraud, 16 counts of wire fraud, three counts of income tax evasion, and three counts of filing a false income tax return. The indictment was unsealed today, following Waters’ initial appearance in federal court. The indictment alleges that from at least 1999 through at least March 2012, Waters embezzled the funds to support his personal lifestyle.
The victim of the embezzlement is a former senior executive and shareholder at West Publishing, for whom Waters worked from approximately 1994 to 1996. After retiring in 1996, the victim hired Waters to manage his numerous personal, business, and philanthropic pursuits. According to the indictment, Waters served in that capacity from 1996 to March 2009, during which time he was responsible for the oversight and management of the victim’s considerable assets, including numerous bank, trust, and investment accounts. To that end, Waters reportedly obtained signing authority on a number of the accounts.
The indictment alleges that Waters used that signing authority to transfer millions of dollars from his employer’s accounts to accounts controlled by Waters, all without his employer’s knowledge or permission. To conceal the scheme, Waters reportedly used a bank account he controlled in the name of a deceased foreign exchange student, made false entries in his employer’s books and records, and directed others to refrain from reviewing certain bank statements.
After Waters left his position and the alleged embezzlement was uncovered, he purportedly discouraged his former employer from reporting it to authorities. He allegedly went so far as to threaten his former employer, warning him that harmful information about him would be revealed if he turned Waters in. The indictment asserts that, as part of the scheme, in March of 2012, Waters commenced a civil lawsuit against his victim, falsely alleging that the funds he took while an employee constituted payment of “deferred compensation” owed him pursuant to an oral modification of his employment agreement.
The indictment also states that Waters failed to report as income on his 2007, 2008, and 2009 federal tax returns the millions of dollars he embezzled. Accordingly, he allegedly filed false tax returns for those three years in addition to committing tax evasion.
If convicted, Waters faces a potential maximum penalty of 20 years in prison on each count of mail and wire fraud, five years on each count of income tax evasion, and three years on each count of filing a false tax return. Any sentence would be determined by a federal district judge.
This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations. It is being prosecuted by Assistant United States Attorney William J. Otteson.
An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
The victim of the embezzlement is a former senior executive and shareholder at West Publishing, for whom Waters worked from approximately 1994 to 1996. After retiring in 1996, the victim hired Waters to manage his numerous personal, business, and philanthropic pursuits. According to the indictment, Waters served in that capacity from 1996 to March 2009, during which time he was responsible for the oversight and management of the victim’s considerable assets, including numerous bank, trust, and investment accounts. To that end, Waters reportedly obtained signing authority on a number of the accounts.
The indictment alleges that Waters used that signing authority to transfer millions of dollars from his employer’s accounts to accounts controlled by Waters, all without his employer’s knowledge or permission. To conceal the scheme, Waters reportedly used a bank account he controlled in the name of a deceased foreign exchange student, made false entries in his employer’s books and records, and directed others to refrain from reviewing certain bank statements.
After Waters left his position and the alleged embezzlement was uncovered, he purportedly discouraged his former employer from reporting it to authorities. He allegedly went so far as to threaten his former employer, warning him that harmful information about him would be revealed if he turned Waters in. The indictment asserts that, as part of the scheme, in March of 2012, Waters commenced a civil lawsuit against his victim, falsely alleging that the funds he took while an employee constituted payment of “deferred compensation” owed him pursuant to an oral modification of his employment agreement.
The indictment also states that Waters failed to report as income on his 2007, 2008, and 2009 federal tax returns the millions of dollars he embezzled. Accordingly, he allegedly filed false tax returns for those three years in addition to committing tax evasion.
If convicted, Waters faces a potential maximum penalty of 20 years in prison on each count of mail and wire fraud, five years on each count of income tax evasion, and three years on each count of filing a false tax return. Any sentence would be determined by a federal district judge.
This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigations. It is being prosecuted by Assistant United States Attorney William J. Otteson.
An indictment is a determination by a grand jury that there is probable cause to believe that offenses have been committed by a defendant. A defendant, of course, is presumed innocent until he or she pleads guilty or is proven guilty at trial.
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