Financial analyst pleads guilty to $1.3M embezzlement scheme

RICHMOND, Va. – A New York man pleaded guilty today to conspiracy to commit wire fraud for his part in embezzling over $1.3 million from his employer.

According to court documents, beginning in 2019, Luis Lee, 38, was the Senior Financial Analyst for a health services provider headquartered in Fredericksburg, Virginia. The company operates counseling and therapy programs, a foster care program, and programs focused on autism and intellectual and developmental disabilities. Lee was promoted to Treasury Manager in October 2022. As Senior Financial Analyst and Treasury Manager, Lee was responsible for monitoring the company’s bank accounts and payment processing, ensuring quality standards with third-party vendors, conducting risk and cash flow forecasting, and working with internal and external auditors, among other responsibilities.

In March 2020, Lee and a co-conspirator, the Chief Financial Officer (CFO) of the company, set up a fake vendor called JKemp Consulting LLC, and Lee opened a business checking account for JKemp. The CFO drafted a fraudulent engagement letter purporting to reflect an agreement between JKemp and the company to pay JKemp $100,000 per month in exchange for “various strategic and consulting services.” Beginning on March 26, 2020, the CFO drafted and submitted 12 fraudulent JKemp invoices for a total of $1,140,000, all of which his employees processed for payment in accordance with his instructions. Lee processed payments for some of the invoices, which he knew were fraudulent. Lee and the CFO divided the proceeds between themselves.

Lee and the CFO also bilked the company for $177,962 through a scheme to take advantage of a tuition reimbursement benefit. The company allowed employees to seek reimbursement for certain approved educational expenses for a maximum reimbursement of $5,250 per year. Between November 2020 and December 2022, the CFO drafted false documentation showing Lee’s purported enrollment in Hofstra University’s Master of Business Administration program. Though Lee was never enrolled in the program, Lee and the CFO caused the company to process the maximum reimbursement in 2020, 2021, and 2022. In November 2022, a final fraudulent reimbursement of $162,212 was processed.

Finally, in April 2022, the CFO directed an employee in his department to “pay out [Lee’s] entire vacation balance on the next payroll.” The employee processed the payment as directed, paying Lee approximately $6,000. The company’s policies authorized neither the directive to pay out Lee’s unused vacation hours nor Lee’s receipt of the funds.

In total, the conspirators misappropriated approximately $1,323,962 from the company.

Lee is scheduled to be sentenced on July 26. He faces a maximum penalty of 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and Stanley M. Meador, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after Senior U.S. District Judge Henry E. Hudson accepted the plea.

Assistant U.S. Attorneys Robert Day and Thomas A. Garnett are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3: 24-cr-30.