Couple embezzled funds intended for returning war vets

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Embezzlement

SAN DIEGO — A husband and wife were convicted Friday by a federal jury of embezzling federal funds that were intended to provide job training, benefits and equipment for injured Marines returning from Iraq and Afghanistan.

Judith Paixao and Kevin Lombard were directors from 2007-2009 of the Wounded Marine Careers Foundation, a tax-exempt entity that trained injured veterans for careers in the film industry.

Evidence presented at the four-week trial showed that Paixao and Lombard conspired to defraud the Department of Veterans Affairs and submitted false claims to the VA to get funds for training and equipment they never provided, U.S. Attorney Laura Duffy said.

Paixao, 61, and Lombard, 64,  both of Brunswick, Georgia, were also convicted of several felony counts related to embezzling funds from the foundation, Duffy said.

Paixao was also convicted of one count of mail fraud for her role in a scheme to defraud another charity out of scholarship funds, Duffy said.

Paixao and Lombard used some of the funds to pay for a variety of personal expenses, including a vacation in Bermuda, cellphone bills for their family members, and the costs of a New Year’s Day sailing trip around San Diego Bay, Duffy said.

Paixao and Lombard claimed to have donated more than $200,000 to start the foundation, they ended up taking more than $400,000 from the foundation’s accounts over the course of two years, Duffy said.

Rather than paying the foundation’s creditors, some of whom were board members, Paixao and Lombard transferred funds to their own personal credit cards and bank accounts, Duffy said.

Although some of this money went to repay expenses they had fronted to the foundation, Paixao and Lombard ended up taking more than $100,000 for themselves, Duffy said.

Paixao and Lombard routinely commingled the finances of the foundation with their personal finances, thereby obstructing the ability of the Internal Revenue Service to monitor the foundation’s tax-exempt status and determine the defendants’ personal income tax liability, Duffy said.

Sentencing is scheduled for Oct. 19.

“Any fraud against our federal agencies is a serious matter, but the fraud committed by these defendants — who used money set aside to help wounded veterans and spent it on themselves — is particularly offensive,” Duffy said.

“These defendants capitalized on the misfortune of wounded marines in their time of vulnerability and took advantage of the VA’s commitment to serving wounded veterans to defraud the VA and enrich themselves.”

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