Ex-manager's sentence ends Staples case

No police misconduct found in long probe, federal prosecutors say

July 19, 2002|By Gail Gibson | Gail Gibson,SUN STAFF

The one defendant in a high-profile police moonlighting investigation was sentenced to two years in prison yesterday as federal prosecutors offered a new account of the case, saying it involved a substantial management failure at Staples Inc. but not police misconduct.

Backing off assertions that more than 39 off-duty Baltimore-area police officers were paid for security work they never performed, prosecutors said in revised court papers that a $348,101 loss to the office supply store chain was the result of sloppy record-keeping and overpayment to officers.

Michael Hollander, 37, a former loss-prevention manager with Staples Inc., admitted in May that he had defrauded his employer. U.S. District Judge William M. Nickerson sentenced him yesterday to the two-year prison term and ordered him to repay the $348,101.

Hollander's plea means he is unlikely to face other charges in the case. In a letter to Nickerson, officials with Staples asked the judge to consider another loss of more than $160,000 - money they contend Hollander embezzled from a petty cash fund kept in a store safe.

Assistant U.S. Attorney Christine Manuelian said authorities considered that a separate incident, one that she said Staples could pursue in a lawsuit. She said Hollander had cooperated in the two-year FBI investigation, although it never reached beyond his own wrongdoing.

"Truly due to no fault of his own, the government felt it did not have enough evidence go further than his own case," Manuelian said. "It was simply a question of what the government could go forward on, given the evidence we were able to muster in this case."

When Hollander pleaded guilty in May to one count of mail fraud, Manuelian had offered a glimpse at where investigators believed the case was headed. In open court and in court records, she described a scheme where police officers were hired and paid to provide extra security for area Staples stores, but never required to report to work.

The original plea agreement referred to the officers as "ghost employees" - some of whom earned as much as $40,000.

After news reports on that agreement, however, federal prosecutors said those allegations against the police officers - spelled out in the May plea agreement with Hollander - were never proved.

An amended statement of facts filed yesterday instead portrays Hollander as signing time sheets without confirming whether the officers had "actually worked their submitted hours" and improperly billing the work to stores other than where the officers were assigned.

According to the revised account, "Hollander would also falsely attribute the officers' hours on their time sheets to work assignments that were not accurate."

Hollander had been authorized to hire off-duty police officers to help provide security for Staples branches in the area. Terry Hooper, an assistant to Hollander, was assigned to hire the officers.

Hollander's attorney, Gary A. Ticknor, described Hooper yesterday as having connections to area police departments and driving the fraud. Hooper, who was not charged, could not be reached for comment.

Almost all the officers who came under scrutiny were members of the city police force, authorities have said. A few worked for Baltimore County.

The long-running case, which the U.S. Attorney's Office says is closed, frustrated police officials in Baltimore and Baltimore County as well as union leaders, who had expressed concerns that the probe tainted their ranks without any criminal charges being filed.

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