Kickback scheme allegedly used to overbill company
Federal authorities arrested a Lionsgate executive and a vendor in an alleged $2.1 million kickback scheme to overbill the company for retail homevideo display cases.
The FBI said that Roccio James Cuccia, 31, of Downey, Calif., and Larry D. Collins, 50, of Northridge, were charged in a 14-count grand jury indictment returned by a federal grand jury last week. The charges include wire fraud, money laundering and tax evasion.
Cuccia worked as a senior buyer at Lionsgate in 2006, responsible for acquiring cardboard advertising used to display Lionsgate DVD and Blu-ray discs. According to the indictment, Collins was a vendor who supplied the cases to retail stores from 2006 to 2011.
The grand jury indictment alleges that Cuccia went into Lionsgate’s computer system and inflated the number of previously approved display cases ordered from Collins. Collins would then produce fraudulent invoices for the inflated purchase orders.
The indictment accuses Collins of wiring a portion of the funds he received to Cuccia’s bank account, with losses to Lionsgate totaling about $2.1 million. The indictment lists 10 wire transfers totaling more than $745,000.
Federal agents on Friday seized a 2007 Toyota Camry Hybrid and a 2006 Mercedes Benz R350 that Cuccia allegedly purchased with the kickback funds. Authorities also allege that he didn’t report the funds as income on his 2006 and 2007 federal tax returns.
Cuccia and Collins appeared before a federal magistrate in U.S. District Court in Los Angeles on Friday afternoon and were granted bond. Each was charged with 10 counts of wire fraud, and Cuccia is charged with two counts of conducting a monetary transaction in criminally derived property greater than $10,000 and two counts of subscribing to false tax returns.
If convicted of all charges, Cuccia faces a maximum sentence of 226 years in prison. Collins faces 200 years in prison.
The FBI, the IRS and Santa Monica police conducted the investigation, and authorities said Lionsgate cooperated.
A Lionsgate spokesman declined comment.