Former Hotel Workers Plead Guilty to Fraud Scheme

The former hotel manager and chief engineer of the Sheraton Hotel at the University of Pennsylvania both pleaded guilty to submitting false invoices to their employers in exchange for kickbacks from third-party vendors, according to Philly.com.

Kenneth Kapikian, 57, of Wayne, and Dennis Gagliardi, 60, of Chester Springs, will be sentenced in September for federal charges of wire fraud and conspiracy to commit money laundering.

According to the original indictment, the defendants engaged in a scheme to fraudulently obtain monies from the University of Pennsylvania by falsely billing the University for services the defendants never provided to the Sheraton University City Hotel.

The pair created Cold Wash Zone in 2006, a company that made and installed laundry machines in hotels. The legitimate business functions for Cold Wash Zone ceased in 2008, the charges say, but the pair billed Sheraton with 49 phony invoices for more than $2.3 million between 2008 and 2013.

The Information further alleges the defendants directed vendors of the Sheraton University City Hotel to inflate their invoices submitted to the hotel and then pay them the fraudulently inflated amounts as kickbacks.

Kapikian and Gagliardi each face possible sentences of 160 years in prison, a three-year period of supervised release, a fine of up to $500,000, and an $800 special assessment, according to the Department of Justice.