Towaco Man Gets 54 Months for Embezzlement

A 39-year-old man was sentenced to 54 months in prison Wednesday for embezzling more than $10.4 million from his employer, Columbus Hill Capital Management LP, between February 2008 and March 2011.

A joint FBI and IRS criminal investigation led to the initial charges.

David Newmark, who worked as the chief financial officer for the Short Hills-based firm, had pled guilty to one count of wire fraud and one count of tax evasion before U.S. District Judge William H. Walls, according to U.S. Attorney Paul J. Fishman. Newmark was sentenced in Newark Federal Court to three years of supervised release and ordered to pay $10,442,379 in restitution in addition to his prison sentence.

According to the U.S. Attorney's Office, Newmark had embezzled by requesting wire transfers and checks from the custodians of the company and then diverting the transfers and checks to accounts he controlled. He then deposited the checks and wires into a bank account the U.S. Attorney's office said he set up with a similar name to that of his company. One wire transfer in April 2010 was for $2.4 million.

The U.S. Attorney's office said the majority of embezzled money was that of the company and not investor funds.

Additionally, in the 2008 tax year, the U.S. Attorney's Office said Newmark did not disclose to the IRS more than $2.8 million he received "in connection with the fraudulent scheme."

"That failure resulted in a tax loss to the United States of $1,012,441," the U.S. Attorney's office said in a press release.

The U.S. Attorney's Office also said more than $1.6 million has been recovered by the United States through a preliminary order of forfeiture

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