Errol Buggs, a principal financial analyst for Honeywell International, Inc., was sentenced to federal prison last Friday for embezzling more than $1.1 million from his employer in a fraud scheme.
“Financial professionals who are unscrupulous are an insider threat to their employers because they have access to payment systems and can learn how to circumvent internal controls to enrich themselves,” said U.S. Attorney Byung J. “BJay” Pak. “Employers must remain vigilant against fraudulent vouchers, fictitious vendors, and sharing or theft of log-in credentials by employees.
“Wire fraud is an offense the FBI takes very seriously,” said Chris Hacker, Special Agent in Charge of the FBI Atlanta Field Office. “Buggs took advantage of his position as a financial analyst for his own personal greed, violating the trust put in him by his employer.”
According to U.S. Attorney Pak, the charges and other information presented in court: From January 2012 through June 2016, Buggs worked in the Roswell, Georgia office of Honeywell International, Inc., an American multinational conglomerate headquartered in New Jersey. An employee at a Honeywell subsidiary in Canada discovered three suspicious wire transfers to a supposed vendor in Georgia for which there were no supporting invoices.
An investigation determined that the payee, Tredd LLC, was a shell company incorporated by Buggs, who was listed in the Georgia Secretary of State’s Office as its Chief Operating Officer. Further investigation showed that Buggs setup Tredd as a vendor in Honeywell’s invoice payment system using a legitimate vendor’s address.
As a senior finance analyst, Buggs was authorized to approve vouchers initiated by colleagues. The defendant used the log-in credentials of a colleague and the credentials of two former employees. By masquerading as other employees, Buggs was able to approve fictitious vouchers and bypass safeguard restrictions against self-dealing of this kind. He used this scheme to cause 28 wire transfers and a check to be sent to his bogus Georgia company. The money trail led to a bank account controlled by Buggs in metropolitan Atlanta. The total amount embezzled was determined to be $1,134,493.35.
Errol Buggs, 44, of Atlanta, Georgia, was sentenced to two years in federal prison, to be followed by three years of supervised release on November 15, 2018, by U.S. District Judge Thomas W. Thrash, Jr. He was also ordered to pay $1,134,493.35 in restitution to Honeywell.
The case was investigated by the Federal Bureau of Investigation.