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A staffing executive who turned in his CFO for embezzling was ultimately sentenced to almost five years in prison himself, the U.S. Attorney’s Office for the Southern District of Iowa reported.
A judge sentenced Dinesh Sethi, owner of DES Staffing Services, to 57 months in prison for a scheme to avoid paying $778,940 in workers’ comp premiums to Travelers and Liberty Mutual Insurance companies, according to the U.S. Attorney’s Office. Sethi must also pay $778,940 in restitution.
Sethi created two shell companies, Staffing Professionals and KDM Staffing, and transferred DES employees to those entities to avoid larger workers’ comp premiums owed by DES as a result of its accident and claims history, according to the U.S. Attorney’s Office. Sethi also directed CFO Randy Stringer to shift payroll from job classifications which had high premium rates to job classifications which had lower premium rates.
The investigation began after Sethi reported embezzlement by Stringer to the FBI, according to the U.S. Attorney’s Office. Stringer was sentenced to prison and is now out on suprevised release. He provided the FBI with documentation of the payroll shifting and the shell corporations.