Cleveland Executive Heading To Prison For Ripping Off Employees

ROCKY RIVER, OH — Rocky River businessman C. David Snyder has been sentenced to two years in prison for embezzlement and tax crimes, most of which saw the executive rip off his employees. He was also ordered to pay about $781,000 in restitution, the Department of Justice announced.

Snyder was convicted in mid-June of this year of embezzling $126,000 from an employee retirement fund while serving as an executive at Attevo, Inc. and Ruralogic, Inc. He was also convicted of collecting $860,000 from his employees in payroll taxes — but not paying that money to the IRS.

“C. David Snyder was placed in the utmost position of trust by Attevo, Inc. and Ruralogic, Inc., but he chose to abuse that position of trust for his own personal greed,” said Ryan L. Korner, Special Agent in Charge, IRS Criminal Investigation, Cincinnati Field Office. “These companies ended up being his own personal piggy bank as he used their money to pay for his residence, vacation home, vehicles, and other personal expenses. Now he is a convicted felon and owes a substantial amount of money to the IRS.”

Snyder, 61, was the chairman, president and CEO of Attevo, a technology consultancy in Cleveland. He was also the chairman and primary shareholder at Ruralogic, a company headquartered in Bryan, Ohio.

In 2011, on behalf of Attevo, Snyder entered into a monthly payment plan with the IRS. The company was set to pay $48,350, monthly, to repay the company's outstanding payroll tax liabilities.

The company made 10 payments — totaling $483,500 — then made no further payments, the IRS said. Snyder still withheld the payroll taxes from his employees, but didn't pay it to the IRS. Ultimately, he failed to pay $328,355 for 2010 and $520,778 in 2012, court documents said.

Snyder also added Ruralogic to Attevo's 401(k) and profit-sharing plan in 2010. The plan was funded through employee payroll deferrals. Over a two year span, from 2010 to 2012, Snyder failed to pay $126,000 into the plan — money culled from contributions and loan repayments withheld from Attevo and Ruralogic employee wages, court documents said.

So what was Snyder spending the money on? Himself, the Department of Justice said.

Snyder was reportedly paying $20,000 per month for the rental of a personal home in Lakewood, a vacation home in Chautauqua, New York, his leases on four vehicles, and other personal expenses, according to court documents and trial testimony.

He also used Attevo's American Express account to pay for women's clothing at Ann Taylor, Nieman-Marcus and other stores; beauty supplies at Oro Gold in Las Vegas, travel to resorts in Florida, and for pool and spa renovations, court documents show.

Between 2009 and 2012, Snyder earned about $1.6 million in income from Attevo, according to court documents and trial testimony.

“This defendant embezzled money from his employees and pocketed taxes he took out of their paychecks, which he used to pay for his vacation home, swimming pool renovation and to otherwise fund his lifestyle,” U.S. Attorney Justin Herdman said. “This sentence demonstrates that we take fraud seriously and criminals will be held accountable, whether they operate on street corners or in corner suites.”

(For more news like this, find your local Patch here. If you have an iPhone, click here to get the free Patch iPhone app; download the free Patch Android app here. And like Patch on Facebook!)

Photo from Shutterstock