Phillips indicted on fraud charges |
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Phillips indicted on fraud charges
MOD Systems co-founder Mark Phillips was indicted today on multiple counts of fraud for allegedly embezzling money from the Seattle company, and then using the funds to purchase Breguet watches and to make a personal investment in a Redmond startup. Today's indictment, filed in U.S. District Court in Seattle, included three counts of wire fraud, one count of mail fraud and one count of attempted bank fraud. Phillips remains incarcerated at the Sea-Tac federal detention center following multiple bond violations, the most recent of which was an illegal inhalation charge in which the high-tech executive allegedly huffed dust cleaning spray in what his attorney called a "cry for help."
Last March, Phillips was arrested on two counts of wire fraud. At the time of the arrest, he was not indicted. Today's indictment repeats much of what was brought to light in those original charges, including an alleged scheme by which Phillips funneled money through a girlfriend's consulting firm in order to purchase the watches and insert money in his personal bank account. The indictment suggests that the fraud occurred between January 2008 and March 2010.
A new allegation, however, is that Phillips also used funds from MOD Systems to make a $25,000 personal investment in Sampa Corp. in 2008.
"Mark E. Phillips never had permission or authority from MOD to use MOD's corporate funds to pay Wallace Black or J.W, or to use such funds for his personal benefit to buy watches, deposit in his personal account, or make a personal investment in Sampa Corporation," the indictment says.
The attempted bank fraud charge stems from an alleged plan by Phillips to gain access to MOD's corporate bank account following his resignation from the company. "Mark E. Phillips informed Wells Fargo employees that he was re-taking control of MOD, and insisted on an immediate change to signatory authority to MOD's Wells Fargo bank accounts," the indictment says. "Specifically, Mark E. Phillips demanded that Wells Fargo remove all of the current signatories to MOD's accounts and substitute himself as the signor."
Phillips co-founded MOD -- a maker of digital media kiosk technology -- in 2005. The company's investors include Toshiba and NCR.
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