CIO gets six years for embezzlement scheme

The former CIO at a large U.S. automobile processing company has been sentenced to nearly six years in prison for embezzling more than $500,000 from the company by faking expense reports and reselling company equipment.

Dale Frantz, 46, was sentenced Friday in U.S. District Court for the Western District of Washington, after pleading guilty to fraud charges. Auto Warehousing Company (AWC) hired him in 1998, even though he had served a prison stint in the 1990s for a similar crime. Frantz made headlines three years ago for switching the company to the Mac after a software licensing dispute with Microsoft.

Between 2007 and 2009, Frantz used a number of techniques to steal money from AWC, a Tacoma, Wash., company that delivers cars from ports and manufacturing plants to dealerships. He wrote up fake invoices for expense reports and altered legitimate ones to boost his reimbursements, and used company funds to buy computer equipment that he later resold on the Internet. He had a co-conspirator set up a company called Asyncritus Technology to generate invoices for nonexistent services, taking a split of the profits, the U.S. Department of Justice said.

In 2007, Frantz tried to switch AWC to the Mac OS platform, after becoming involved in a public dispute with Microsoft, after the software vendor pressured him to audit his company's software licenses. That project was delayed after employees and partners pushed back, but the company now has more than 100 Macintosh computers helping to run operations, according to Apple's Web site.

In a Dec. 9 letter to the judge in the case, Frantz said he led a tortured double life as both successful executive and embezzler, a life that came to an end when he was fired from his job. "I was relieved to be terminated," he wrote.

In addition to the 71-month sentence, Frantz must pay $516,358 in restitution to AWC.

In 1996, Frantz got a four-year sentence for stealing $200,000 while office manager at an Indiana audio shop.

Robert McMillan covers computer security and general technology breaking news for The IDG News Service. Follow Robert on Twitter at @bobmcmillan. Robert's e-mail address is robert_mcmillan@idg.com

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