Rhode Island Man Pleads Guilty to Defrauding the Hartford and Tax Evasion

Nora R. Dannehy, Acting United States Attorney for the District of Connecticut, announced that MICHAEL YOUNG, age 35, of Goldfinch Drive in Coventy, Rhode Island pleaded guilty today to a two-count Information charging him with mail fraud and tax evasion. YOUNG entered his plea this morning before Senior United States District Judge Alfred V. Covello.

According to documents filed with the Court and statements made at the court hearing, YOUNG was employed by a company that did business with The Hartford Insurance Company (“The Hartford”). From approximately 2001 through July 2005, YOUNG conspired with Todd Olynciw to defraud The Hartford. Olynciw, a Project Procurement Manager for The Hartford, was previously sentenced to 28 months for this fraud. According to documents filed with the Court and statements made at the court hearing, YOUNG used a cleaning business, referenced as Entity B, to coordinate the delivery and installation of furniture on behalf of The Hartford. Olynciw arranged for The Hartford to award more than $3.6 million in contracts to Entity B, in exchange for personal payments or kickbacks.

As a further part of the scheme to defraud The Hartford, Olynciw misappropriated and transferred unlawfully to Entity B furniture that was owned by The Hartford so that Entity B could sell the furniture for profit. According to documents filed with the Court and statements made at the court hearing, Entity B did not pay The Hartford for substantial amounts of furniture that were transferred from The Hartford to Entity B. On the other hand, YOUNG sold the furniture that Entity B obtained from The Hartford for approximately $2,052,928. In exchange for Olynciw (a) causing The Hartford to enter into contracts with Entity B for coordinating the delivery and installation of furniture and (b) misappropriating and transferring unlawfully to Entity B furniture that was owned by The Hartford, YOUNG paid Olynciw at least $207,783.41 in kickbacks in the form of cash, checks, gifts and, at Olynciw's direction, payments to third parties for automobile expenses, housing expenses and other personal expenses.

In addition, for tax years 2001 through 2004, YOUNG failed to report much of the profits that he received from his arrangement with Olynciw on his personal tax returns for taxable years 2001 through 2004.

Judge Covello scheduled sentencing for September 10, 2009, at which time YOUNG faces a maximum term of imprisonment of 20 years with respect to the mail fraud offense and a maximum term of 5 years’ imprisonment with respect to the tax offense. In addition, YOUNG faces a maximum fine of as much as $250,000 or twice the gross gain or loss resulting from the offense with respect to each offense. YOUNG must pay restitution to The Hartford for the losses it suffered, which YOUNG admitted was at least $587,834. YOUNG also must pay to the Internal Revenue Service back taxes in the amount of $507,861, plus penalties and interest.

This case was investigated by the Federal Bureau of Investigation and the Internal Revenue Service -- Criminal Investigation Division. The Hartford Insurance Company also assisted in the investigation. The case is being prosecuted by Assistant United States Attorney Geoffrey M. Stone.

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