Two suburban Philadelphia men were charged Tuesday in a scheme to defraud the University of Pennsylvania of more than $3 million.
Kenneth Kapikian, 57, of Wayne, and Dennis Gagliardi, 60, of Chester Springs, each were charged with seven counts of wire fraud and one count of conspiracy to commit money laundering, U.S. Attorney Zane David Memeger announced.
The defendants allegedly charged Penn for services they never provided to the Sheraton University City Hotel, where Kapikian served as general manager and Gagliardi as chief engineer, according to court documents. The hotel is owned by the university.
The defendants allegedly submitted fraudulent invoices totaling more than $2.5 million for services purportedly provided by Cold Wash Zone, LLC, a business they initially created to assume equipment leases of a company that installed hotel laundry machines, according to court documents. They also allegedly directed hotel vendors to inflate their invoices submitted to the hotel and provide kickbacks to the defendants.
Kapikian allegedly received more than $700,000 in kickbacks from a trio of accused co-conspirators not identified by the U.S. Attorney's Office.
The scheme allegedly lasted from May 2008 until January 2014, according to court documents.
If convicted, Kapikian and Gagliardi each face a maximum sentence of 160 years in prison, a three-year period of supervised release and a maximum fine of $500,000.
Homeland Security Investigations investigated the case. Assistant U.S. Attorney Melanie Babb Wilmoth is prosecuting it.