United States Attorney's Office District of Connecticut
Press Release

January 18, 2008

Kevin J. O'Connor, United States Attorney for the District of Connecticut, announced that JEFFREY F. GROUS, 44, of Tolland, was sentenced today by United States District Judge Janet Bond Arterton in New Haven to 36 months of imprisonment, followed by three years of supervised release. Judge Arterton also ordered GROUS to pay a fine in the amount of $10,000. On July 9, 2007, GROUS waived indictment and pleaded guilty to one count of wire fraud, one count of mail fraud, one count of tax evasion, and one count of filing a false tax return. The charges stem from a decade-long scheme through which he embezzled approximately $5.3 million from his former employer.

According to documents filed with the Court and statements made in court, GROUS was an employee of a global investment firm specializing in fixed-income products. Between 1991 and 2005, GROUS held various positions at the investment firm, including Assistant Vice President, Assistant Controller, and Controller. As Controller of the investment firm, GROUS had responsibilities such as financial reporting auditing, budgeting, and asset management billing. In pleading guilty, GROUS admitted that, between approximately February 1996 and April 2005, he devised a scheme to defraud the investment firm of approximately $5.3 million and spent the money for his own personal use and enjoyment, including the purchase of watches totaling approximately $449,219.02, the construction of a luxury home, and the purchase of expensive cars, clothing, and vacations.

As part of the scheme, GROUS formed two sham companies, Equity Analysis and Research Consultants. He then submitted false invoices for consulting services by these sham companies and approved the fraudulent requests, or forged the signature of an officer at the investment firm with the authority to approve the payment requests, which resulted in the investment firm paying approximately $1.86 million to Equity Analysis and $1.25 million to Research Consultants. In addition, from approximately June 1996 through December 2004, GROUS submitted to the investment firm AMEX charges and fraudulent payment forms, including a false description that the expenses were for business purposes of officers of the investment firm. GROUS approved, or forged the signature of others for approval, AMEX charges, which resulted in the investment firm making payments of approximately $2.24 million to AMEX for GROUS' personal expenses.

Finally, GROUS filed false income tax returns for the years 2000 through 2002 and evaded the payment of taxes for the years 2003 and 2004.

To date, GROUS has paid to his former employer restitution in the amount of $915,125.04. Today, Judge Arterton ordered GROUS to pay an additional $4,431,382 in restitution. GROUS also owes back taxes in the amount of $1,635,932, plus substantial penalties and interest.

This case was investigated by Special Agents of the Federal Bureau of Investigation and the Internal Revenue Service - Criminal Investigation Division. The case was prosecuted by Assistant United States Attorney Nora R. Dannehy.

CONTACT:

U.S. ATTORNEY'S OFFICE
Tom Carson
(203) 821-3722
thomas.carson@usdoj.gov