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Two Rockwell Executives Charged With Wire Fraud, Money Laundering

Two Rockwell Executives Charged With Wire Fraud, Money Laundering

On October 27, 2021, federal prosecutors filed criminal charges against two Rockwell Automation executives, Kevin Chao and Richard Sze, alleging an illegal kickback scheme by which the two diverted millions of dollars into their personal accounts. Specifically, Chao and Sze are charged with helping secure a purported $30 million software contract between Rockwell and a Chinese software development company, submitting and authorizing false invoices for funds that were then funneled to Chao and Sze through a shell company.

The allegation states that in 2012 Chao and Sze contracted with a Chinese software company owned by Chao’s friend and former colleague from a prior business at which Chao and Sze worked.  With the assistance of this individual, Chao and Sze were paid kickbacks that defrauded Rockwell. Chao and Sze established a shell company in California and then laundered the kickback proceeds totaling nearly $17 million. Reports show both Chao and Sze resigned from Rockwell in 2019 after an investigation began. The most recent online information shows Sze’s title was Manager, Software Engineering, and Chao’s title was Vice-President, Engineering. Both worked in Silicon Valley.

According to the federal arrest record, Chao and Sze set up a California shell company, Mooteec, to receive the payments.  Mooteec does not produce any product or service, maintains a P.O. box as its mailing address, and has no physical office. Investigators concluded that Mooteec was a shell company established to launder the illegal proceeds of the kickback scheme.

Both men are facing wire fraud, honest services, and wire fraud or conspiracy to commit wire fraud charges. They could be sentenced to 20 years in prison and a 250,000 fine, or double the total profit or total loss, if they are convicted. Money laundering can carry a maximum sentence of 20 years in prison and a $500,000 fine or double the value of any property involved.

 

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Discussion (1 comments)

    Troy Kraft November 18, 2021 / 1:51 pm

    WOW!

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