Indictment In $6.7 Million IT Fraud At Charity

February 19, 2019       1test 2test      

A former information technology vice president allegedly stole some $6.7 million from a United Way affiliate over several years through a shell company he created.

Imran Alrai of Windham, N.H., allegedly created a fictitious sample list of clients, generated fraudulent invoices, and passed off his father as a principal in a shell company he created, according to a 10-page indictment filed by the U.S. District Attorney’s Office for the District of New Hampshire. Alrai was indicted on charges of wire fraud.

Alrai is the former vice president of information technology (IT) at United Way of Massachusetts Bay and Merrimack Valley (UWMB), which is based in Boston, Mass., but has four other regional offices. He also was principal of DigitalNet Technology Solutions (DTS), an outside vendor that was to provide outsourced IT services to the charity.

UWMB reported revenue of $42 million for 2017, including $40 million in contributions and grants. Andover, Mass.-based DTS is listed as one of the organization’s highest-compensated independent contractors for the past several years on its Form 990, totaling more than $4 million over four years:
2017, $1.06 million
2016, $1.205 million
2015, $1.007 million
2014, $796,317

From March 2012 to June 2018, Alrai was employed full-time as senior director of IT with an annual salary of $150,000, and later was vice president, IT, earning $179,000. He was permitted to work much of time remotely, according to the indictment.

DTS was formed in August 2012 and Alrai also formed AISA Consulting Group in February 2012. From February 2012 to July 2018, Alrai “devised and intended to devise a scheme to defraud” his employer. He falsely told his supervisor that he was not close to and did not personally know the owners and employees of DTS.

“Alrai’s material false statements on annual Conflict of interest disclosure forms and his long-standing concealment of his relationship to and control over DTS represented a violation of United Way policies and his fiduciary responsibilities to the organization, according to the indictment.

In late 2012, Alrai allegedly steered the Request for Proposals (RFP) process for the United Way affiliate toward DTS. He falsely and materially descibred DTS as a successful and experienced IT vendor, even though as of early 2013, it had no customers and had never done business other than at United Way. Alrai introduced to his supervisor a man who claimed to be a principal and IT professional at DTS. What Alrai did not tell his supervisor was that it was his father or that he had any connection to the man or the company.

In February 2013, United Way awarded a three-year contract for IT services to DTS at $300,000 per year. Alrai was directing all of DTS functions and fraudulently steering more revenue to the firm. United Way added more services to the contact, increasing payments to $1.1 million annually by 2018, and making it one of the organization’s largest single outside vendors. Between September 2012 and May 2018, United Way paid more than $6.6 million to the shell company’s bank account.

In 2016, United Way requested more information from DTS about its business. Alrai submitted a fraudulent written response that included a fictitious “sample list of clients.” He also regularly created invoices on his home computer and submitted monthly invoices that were generic and non-specific.

Between November 2013 and May 2018, Alrai caused 56 international wire submissions totaling $1.19 million, of which at least $1.15 million constituted proceeds of the fraud scheme, according to the indictment.
UWMB discovered independently the alleged misconduct last spring, terminating

Alrai in June and ending its relationship with DTS. “We notified and have cooperated with the U.S. Attorney’s office and the federal authorities who have been investigating Mr. Alrai’s and DigitalNet’s misconduct, and our cooperation will continue,” the affiliate said in a statement.

“Mr. Alrai never disclosed his relationship with DigitalNet to us, and in fact, he made numerous misrepresentations and took numerous actions to conceal the true nature of the relationship,” according to the statement.
Alrai’s actions violated UWMB’s policies and the undisclosed relationship created a conflict of interest.

“We took appropriate action to protect UWMB, our staff, and the people we serve. We engaged outside experts, including legal counsel, forensic accounting experts, and data security experts, to help us evaluate and respond to these issues. This comprehensive analysis determined that there was no data security breach of any kind, including donor records and information.”