A former executive at the AFTRA Retirement Fund and a business vendor have been arrested and charged with two counts of conspiracy to commit wire fraud in connection with allegedly stealing $3.4 million from the fund
Enrico Rubano, who worked as the co-head of information technology for the AFTRA Retirement Fund, and vendor Shivanand Maharaj, were arrested on Friday. The fund provides retirement benefits and is a separate legal entity from the SAG-AFTRA union.
The U.S. Dept. of Justice alleged that Rubano and Maharaj allegedly used companies they owned or controlled to submit invoices to the AFTRA Retirement Fund for information technology services that they did not perform. The scam resulted in Rubano and Maharaj taking about $3.4 million from the scheme from 2009 to 2015.
Manhattan U.S. Attorney Preet Bharara said Rubano “allegedly had the fund make payments based on hundreds of fake invoices to [Maharaj’s] company, not for IT work actually done by that company, but really in exchange for alleged kickback payments to Rubano.”
The AFTRA Retirement Fund said it found evidence of the crime during an internal review and notified federal law enforcement authorities. SAG-AFTRA President Gabrielle Carteris issued a statement about the arrests, commending Trustees of the fund.
“While the discovery of potential wrongdoing is unsettling, it is reassuring that the AFTRA Retirement Fund Trustees took action to alert the authorities,” she said. “Their response helped root out the wrongdoing and culminated in the arrest of the suspects who will be prosecuted to the fullest extent of the law. I appreciate the assurance that participants’ crucial benefits are protected and safe, and commend the current Trustees for their responsiveness and uncompromising position that wrongdoing will not be tolerated.”
A separate criminal case hit the Screen Actors Guild’s Producers Pension and Health Plans in 2015. Nader Karimi, a former chief information officer for the plans, was granted five years’ probation in April after pleading guilty to filing a false tax return in connection with allegedly embezzling over $700,000.
The retirement fund posted a statement on its web site saying that the case will not have a material effect on benefits. Here is the entire statement:
“AFTRA Retirement has rigorous internal controls and strong fraud prevention procedures in place. We regularly conduct internal reviews of operations to protect our participants.
“During one of these periodic internal reviews of operations, AFTRA Retirement found evidence that there may have been unauthorized expenditures in connection with a vendor relationship. AFTRA Retirement immediately undertook a careful review of the evidence and promptly notified federal law enforcement authorities. AFTRA Retirement has actively cooperated in this investigation and we have been informed that former AFTRA Retirement employee Rick Rubano and an outside vendor have been arrested in connection with the government’s investigation.
“AFTRA Retirement also promptly notified its insurance carrier of this situation and is pursuing recovery of any losses ultimately determined to have been incurred. AFTRA Retirement wishes to assure its participants and other concerned parties that the losses will not have a material financial impact on AFTRA Retirement and participants’ benefits are not at risk. Our participants place their trust in us and we take this trust very seriously. We will continue to take the appropriate steps to protect our participants and their benefits.”
(Gabrielle Carteris is pictured above)