Date: 08-06-2017

Case Style:

Case Number: 4:17-cr-00239-BCW

Judge: Brian C. Wimes

Court: United States District Court for the Western District of Missouri (Jackson County)

Plaintiff's Attorney: Brian P. Casey

Defendant's Attorney: Cynthia Cordes

Description: Kansas City, MO - Former CFO Pleads Guilty to Embezzling $6.5 Million from KC Company

The former chief financial officer of a Kansas City, Mo., company pleaded guilty in federal court on August 2, 2017 to embezzling more than $6.5 million from his employer.

Douglas Ferrell, 34, of Kansas City, waived his right to a grand jury and pleaded guilty before U.S. District Judge Brian C. Wimes to a federal information that charges him with wire fraud and money laundering.

Ferrell began working for Scarbrough International at its headquarters in Kansas City, Mo., in 2005 as an account representative and became the company’s chief financial officer in 2012. Scarbrough International is a privately owned, U.S. Customs Broker and international freight forwarder.

By pleading guilty today, Ferrell admitted that he embezzled approximately $6,523,742 from the company for his own use and enjoyment. From Sept. 1, 2006, to June 10, 2014, Ferrell engaged in a scheme to embezzle company funds by making unauthorized personal charges to the company’s credit card and PayPal accounts, and then using company funds to pay those charges.

Ferrell also made a number of financial transactions of funds that he knew were the proceeds of fraud, including a $650,000 wire transfer (that contained at least $475,625 in fraud proceeds) to Cayman National Bank in the Cayman Islands to purchase a beach house. Ferrell wired a total of more than $2,250,000 to purchase that property. Ferrell also used embezzled funds to ship furnishings from the United States for the property and for additional construction and improvements to the property, including over $77,000 in payments to a Cayman Islands tile company. After the improvements, paid for with additional embezzled funds, the property was valued at over $2.6 million.

The final amount of restitution will be determined at Ferrell’s sentencing hearing, but is estimated to be $1,940,462 due to Ferrell’s partial repayment of restitution. The company has recouped a significant portion of its loss.

Under federal statutes, Ferrell is subject to a sentence of up to 30 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

It was investigated by IRS-Criminal Investigation and the Kansas City, Mo., Police Department.

Outcome: Guilty

Plaintiff's Experts:

Defendant's Experts:

Comments: