Ex-leader of Fredrick firm guilty of fraud

Man's conviction part of agreement before trial

May 11, 2002|By Laurie Willis | Laurie Willis,SUN STAFF

The former head of a Frederick clothing manufacturing company pleaded guilty yesterday in U. S. District Court to one count of mail fraud and one count of filing a false federal income tax return -- just three days before he was to go on trial.

Benjamin J. Gilbert, 54, of Germantown was indicted on 15 counts but will be sentenced on two counts in September. The other 13 charges will be dismissed, according to the plea agreement reached between Assistant U.S. Attorney Dale Kelberman and Gilbert's attorney, Price Gielen.

Gilbert could be sentenced to a maximum of 33 months in prison.

Prosecutors say that Gilbert defrauded the Hartz & Co. Inc. clothing company by creating false invoices for up to $200,000 worth of goods and services, including lawn work, security and improvements at his $2.4 million home in western Montgomery County. Court records say he was reimbursed for personal expenses such as paying support to his ex-wife and rent on his girlfriend's Gaithersburg apartment.

As chief executive officer, Gilbert had authority to approve payment of the invoices.

According to court papers, Gilbert used Hartz's money to pay $500,000 in restitution to a former employer. He had owed the restitution since 1994, when he pleaded no contest in a Pennsylvania court to embezzling $700,000 from an Easton, Pa., hosiery company. He had worked part time as comptroller for the company in the early 1990s, according to an article in The Morning Call of Allentown, Pa. The article was anonymously sent to Abraham Cohen, chairman of the board at Hartz.

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