A former vice president of preconstruction services at MGT Construction, a Richmond-based construction company, has been sentenced to 27 months in prison for his role in a corporate accounting scheme.
According to court documents, Patrick Lindsey engaged in a fraudulent scheme that sought to conceal the company’s true financial position through job-cost manipulations within the firm’s accounting software system.
From 2011 to November 2016, Lindsey moved or deleted thousands of job cost invoices, concealing the fact that the group was over $20m in debt.
As a result, dozens of contractors, subcontractors, and vendors could not be paid for the services or products they had provided to MGT, leading to the firm’s bankruptcy in 2018.
With access to the day-to-day management of the accounting scheme, Lindsey shifted costs to falsely inflate profit margins and conceal losses.
In turn, MGT and its parent company submitted the results of these manipulations as part of the group’s application packages to banks and insurance companies for lines of credit and bonding coverage.
Raj Parekh, acting US attorney for the Eastern District of Virginia, said that Lindsey played an “integral role” in the “large-scale corporate accounting fraud scheme” that was designed to conceal MGT’s debts.
He added: “That deceit not only maintained the defendant’s job and padded his annual compensation package, but it also proved devastating to the individuals who worked on MGT Construction projects and were left holding the bag after the fraud scheme was uncovered and the company subsequently collapsed.
“This office is committed to working with our law enforcement partners to combat corporate malfeasance and hold accountable executives who manipulate others for personal gain.”