Bergen County Couple Charged in Scheme to Defraud Companies out of $3M

Two Bergen County residents were charged in a scheme to defraud two international companies out of $3 million by fraudulently billing them for services that were never completed, U.S. Attorney Paul J. Fishman announced.

Barbara Brown, 64, and Philip Charles de Gruchy, 61, both of Park Ridge, surrendered to federal agents Wednesday and were charged by complaint with one count of conspiracy to commit mail fraud. The defendants made their initial appearances Wednesday before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court and were each released on $250,000 unsecured bond.

According to the complaint filed, Brown was employed by “Company A,” a toy and juvenile’s retailer headquartered in Wayne, from August 2007 to April 2010. As a director of global customer relations management, Brown had authority to pay and hire contractors. Brown made Company A enter a business relationship with CEM, a company Brown and de Gruchy secretly controlled.

From Nov. 5, 2007 to March 4, 2010, CEM submitted more than 60 invoices to Company A for alleged marketing consulting work, which were either copied from other vendors’ work, were related to other businesses, or did not correspond to items on CEM invoices, according to Fishman. The net amount that CEM billed and collected from Company A was $2.855 million.

Although each check issued by Company A were mailed to Canadian addresses, the checks were deposited throughout banks in White Plains, NY. Checks were then written out of CEM’s account payable directly to Brown or de Gruchy, or to Silk Farm and Ontario LLC, companies affiliated with de Gruchy.

The money obtained from the scheme were used for personal uses, like home renovations, mortgage payments on the Park Ridge home Brown and de Gruchy shared and credit card bills, Fishman said.

De Gruchy was also employed at “Company B,” an international manufacturer and retailer of luxury travel suitcases and accessories headquartered in South Plainfield, NJ, from July 2010 to Nov. 2011. As a director of global customer relations management, de Gruchy was responsible for a data migration project designed to help Company B identify customer purchasing patterns. De Gruchy obtained verbal permission to hire Brown for the project, but never disclosed their personal or business relationship.

From Nov. 4, 2010 to Sept. 22, 2011, Company B mailed $216,835 in checks to a Canadian address purporting to belong to Brown, or BI Insights, an alleged Canadian company engaged in marketing consulting services controlled by Brown, according to Fishman. De Gruchy approved all invoices submitted by Brown and BI Insights.

The counts of conspiracy to commit mail fraud carry a penalty of 20 years in prison.