August 18, 2022
Shelbee Szeto was sentenced to 36 months in prison in connection with her scheme to defraud her former employer out of more than five million dollars, announced United States Attorney Stephanie M. Hinds and Internal Revenue Service Criminal Investigation Special Agent in Charge Mark H. Pearson. The sentence was handed down by Honorable Haywood S. Gilliam Jr., United States District Judge.
Szeto, of Fremont, pleaded guilty on March 23, 2022, to wire fraud, money laundering, and related tax charges. According to the plea agreement, Szeto was employed by HP, Inc. (HP) as an executive assistant and finance planning manager from approximately August 2017 until June of 2021. In these roles, Szeto was responsible for making payments to HP vendors and was issued multiple HP commercial credits cards to make the payments on HP’s behalf. Rather than make payments in accordance with the company’s policies, Szeto devised a fraudulent scheme whereby she sent approximately $4.8 million in unauthorized payments from her HP commercial credit cards to several Square, PayPal, and Stripe merchant accounts under her control.
Court documents provide several details of the scheme. For example, court documents describe how, as part of her employment with HP, Szeto was issued multiple American Express commercial credit cards that were intended only for business expenses. Szeto then set up bogus merchant accounts with PayPal, Stripe, and Square that she maintained under her control, but represented were for legitimate vendors. Szeto then unlawfully sent payments from the credit cards to the bogus accounts. To further her plan, Szeto uploaded falsified invoices to HP’s internal system and falsely represented to HP that the payments were made to legitimate vendors. She also made false representations to Square that the payments sent from the credit cards were sent to HP’s approved vendors for legitimate business transactions and falsely represented to her bank that the money from HP was for legitimate business transactions. In total, Szeto caused at least $4.8 million to be fraudulently from HP accounts to accounts she controlled and attempted to steal an additional approximately $330,000 from HP.
On February 11, 2022, Szeto was charged by information with two counts of wire fraud, in violation of 18 U.S.C. § 1343; two counts of money laundering, in violation of 18 U.S.C. § 1957; and one count of filing a false tax return, in violation of 26 U.S.C. § 7206(1). Pursuant to her guilty plea, Szeto pleaded guilty to all five counts.
In addition to the prison term, Judge Gilliam ordered Szeto to serve 3 years of supervised release that will begin after the prison term is concluded. As a special condition of her supervised release, Szeto may not maintain a position of fiduciary capacity or manage a third party’s finances without the prior permission of her probation officer. Szeto was also ordered to forfeit certain luxury items purchased with the proceeds of her fraud. The items for forfeiture were derived from a list that includes the proceeds of a First Republic Bank account; a 2020 Tesla sedan; a 2021 Porsche sport utility vehicle; several bags and purses from Dior, Gucci, Hermes, and Chanel; and a collection of jewelry and timepieces including necklaces, rings, pendants, and watches from Rolex, Bulgari, Audemars Pignet, and Cartier. The list contains 161 line items—some lines of which include multiple items such as “7 necklaces with clover-shaped design,” “6 gold necklaces with pendants,” and “26 pairs of earrings.”
Assistant U.S. Attorney Molly Priedeman is prosecuting the case with the assistance of Leeya Kekona. The prosecution is the result of an investigation by the IRS-CI.