Chief Financial Officer pleads guilty to $1M embezzlement scheme

Press Release

ALEXANDRIA, Va. - A North Carolina man pled guilty today to defrauding his business partner of approximately $1.2 million.

In September 2015, James Marshall Cesena, 39, and his business partner, identified in court records as E.P., formed a company identified as Company A. E.P. was the majority owner, and Cesena had a minority stake. From September 2015 to August 2023, Cesena served as Chief Financial Officer (CFO). In this role, Cesena managed Company A's financial matters and controlled Company A's bank accounts.

Cesena took advantage of his position as CFO to embezzle over a million dollars. Between 2016 and 2023, Cesena directed hundreds of thousands of dollars each year to his personal accounts, while informing E.P. that Company A had cash flow issues and was in financial difficulty. Because of these deceptions, E.P. periodically had to delay or forego receiving her salary.

Cesena used Company A's credit cards and corporate accounts to make hundreds of thousands of dollars in personal purchases that had not been authorized by the Company A. This included expenditures on vacations, travel and airfare, amusement parks, school, home improvements, and living expenses. From 2020 to 2023, Cesena took out a credit card in E.P.'s name without her knowledge and consent and charged approximately $75,000.

To conceal his fraud, Cesena generated false financial statements, which he provided to E.P. and their business consultant. Cesena also masked his personal expenditures in Company A's accounting software by labeling them as legitimate corporate expenditures. For example, sizeable payments for alcohol and cruise packages were reported as "Office Expenses." He then provided these fraudulent records to Company A's tax preparer. The financial data misreported Company A's total gross receipts and expenses, and the information was then packaged into corporate tax returns.

To cover Company A's chronic cash-flow issues caused by his sizeable distributions from corporate accounts, Cesena took out high-interest loans in the name of Company A and E.P., without E.P.'s knowledge or consent. To convince loan officers that he was authorized to take out the loans, Cesena misrepresented that he owned as much as 75% or 80% of Company A. Cesena received at least five loans or lines of credit, on at least one of which Company A ultimately defaulted.

In 2019, Cesena created an email account with Company A's domain in the name of E.P., which he used to apply for business loans and monitor E.P.'s credit. Cesena used E.P.'s name, date of birth, social security number, and other personal information to fraudulently open accounts or obtain money.

In total, Cesena fraudulently took $1,195,878 through direct transfers, charging personal expenses to Company A's accounts, and charges to the credit card in E.P.'s name.

Cesena is scheduled to be sentenced on Jan. 29, 2025. He faces up to 20 years in prison. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia, and David E. Geist, Acting Special Agent in Charge of the FBI Washington Field Office's Criminal and Cyber Division, made the announcement after Senior U.S. District Judge Anthony J. Trenga accepted the plea.

Assistant U.S. Attorney Jack Morgan is prosecuting the case. Former Special Assistant U.S. Attorney Likhitha Butchireddygari assisted in the prosecution of this case.

A copy of this press release is located on the website of the U.S. Attorney's Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 1:24-cr-223.

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Updated November 15, 2024