Former Local Business Execs Plead Guilty in Multi-Million Dollar Scheme

Two former Hoboken-based businessmen—Jose Figueroa and Carlos Chorro—plead guilty to running a scheme that cost their customers roughly $1 million and to failing to pay $400,000 in taxes, according to U.S. Attorney Paul Fishman's office.

Figueroa, 37, and Chorro, 36—respectively the former vice president and the former production of sales for payroll services company First Priority Pay—plead guilty in Newark federal court on Friday to one count each of conspiracy to commit wire fraud and one count each of subscribing to false tax returns.

According to Fishman, the scheme ran from January 2008 to November 2009.

The two men manipulated the company's computer system, diverting funds from their roughly 3,500 clients to a debit account from which Figueroa and Chorro extracted money themselves.

According to Fishman's office, the two men both used the diverted funds—that should have gone from their clients to the Internal Revenue Service—for personal expenditures. Roughly 128 cash transactions totaling $306,140 were deposited into bank accounts controlled by Figueroa, and 200
transactions totaling $278,125 were deposited into bank accounts controlled by Chorro.

From July 2009 through November 2009, according to the U.S. Attorney, Figueroa caused 24 wire transfers totaling $588,366 to be transferred from FPP’s clients’ bank accounts to a bank account controlled by Figueroa. In September 2009, Figueroa transferred $95,000 by bank check from a bank account controlled by Figueroa to Chorro.

The men didn't report their additional income to the IRS.

As part of their guilty pleas, Figueroa and Chorro have agreed to make full restitution for all losses resulting from their crimes to the victims of their offenses. In addition, Figueroa has agreed to forfeit $438,000 to the United States, and Chorro has agreed to forfeit $184,000 to the United States.

The men could face a potential penalty of 20 years in prison and a fine that could be as high as $2,500.

The men are scheduled to be sentenced on Jan. 24 and Jan. 25, 2012.