Former Rochester CEO Pleads Guilty To Defraduing His Own Company

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Bribery and corruption concept in business and politics with caucasian businessman and cash money in white envelope

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BUFFALO, N.Y. – U.S. Attorney James P. Kennedy, Jr. announced today that Michael Margiotta, 50, of Rochester, NY, pleaded guilty before U.S. District Judge Charles J. Siragusa to wire fraud and filing a false tax return. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.  

Assistant U.S. Attorney John J. Field, who is handling the case, stated that the defendant was employed as the Chief Executive Officer of eHealth Global Technologies. In May 2011, as eHealth CEO, Margiotta entered into a contract with Healthcare Network Alliance, LLC (HCNA) for employment recruiting services. HCNA was owned by the defendant’s wife. The agreement provided that HCNA would be compensated if candidates referred to eHealth were hired. Between June 2011, and January 2014, Margiotta caused HCNA to submit invoices for recruiting services to eHealth that he knew that HCNA had not provided. For instance, on April 19, 2013, HCNA submitted an invoice to eHealth requesting payment of $44,000 for recruiting an employee. HCNA had not recruited the employee, and defendant knew that HCNA was not entitled to be paid a recruiting fee for the employee. In total, Margiotta caused HCNA to prepare and submit fraudulent invoices for approximately 23 employees of eHealth that HCNA had not recruited totaling $380,960.

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In addition, the defendant filed a false tax return for the year 2013, claiming income of $260,334, in actuality, his taxable income was $611,195.00, resulting in a tax loss to the  IRS of $137,067.


The plea is the culmination of an investigation by the Internal Revenue Service, Criminal Investigations Division, under the direction of Thomas Fattorusso, Acting Special Agent-in-Charge, New York Field Office.

Sentencing is scheduled for October 28, 2021, at 9:30 a.m. before Judge Siragusa.

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