Former Johnson Controls tax lawyer sentenced to 32 months in prison

Scott Hess pleaded guilty following 15-year fraud scheme

A former tax attorney at Johnson Controls Inc. who worked with a law school classmate to embezzle nearly $4.5 million from the company was sentenced to 32 months in prison on Friday.

Scott Hess, of Menomonee Falls, pleaded guilty earlier this year to the scheme, which played out over 15 years. According to court documents, Hess worked with a Craig Hilborn, a personal injury and product liability attorney in Michigan, beginning in 2000 to bill the company for work Hess had done and split the payments.

Johnson Controls paid out nearly $4.5 million of the $4.7 million Hilborn billed the company for. Hess received two-thirds of the money. Hilborn, who has also entered a guilty plea and awaits sentencing later this year, received the other third.

Hess had a similar scheme in place for a number of years with an ex-girlfriend, although Johnson Controls was not able to differentiate between valid and fraudulent payments in that case.

According to court documents, Hess used the money to invest in stocks and purchase tens of thousands of dollars of guns. He also admitted to falsifying expense reports to cover his personal purchase of ammunition, clothing, gift cards and travel to a Major League Baseball All Star game.

According to the prosecutor’s sentencing memo, Hess admitted his involvement when JCI discovered the scheme, but claimed it started in 2008 and that he only received half of the money. He did agree to make a voluntary restitution payment of $2.3 million before the criminal case was filed. He’s agreed to pay another $680,000 in restitution.

Hess’ cooperation led the government to seek a sentence below federal sentencing guidelines, which called for 51 to 63 months of imprisonment. Prosecutors and Hess’ attorney asked for a 33 month sentence.

 

A former tax attorney at Johnson Controls Inc. who worked with a law school classmate to embezzle nearly $4.5 million from the company was sentenced to 32 months in prison on Friday.

Scott Hess, of Menomonee Falls, pleaded guilty earlier this year to the scheme, which played out over 15 years. According to court documents, Hess worked with a Craig Hilborn, a personal injury and product liability attorney in Michigan, beginning in 2000 to bill the company for work Hess had done and split the payments.

Johnson Controls paid out nearly $4.5 million of the $4.7 million Hilborn billed the company for. Hess received two-thirds of the money. Hilborn, who has also entered a guilty plea and awaits sentencing later this year, received the other third.

Hess had a similar scheme in place for a number of years with an ex-girlfriend, although Johnson Controls was not able to differentiate between valid and fraudulent payments in that case.

According to court documents, Hess used the money to invest in stocks and purchase tens of thousands of dollars of guns. He also admitted to falsifying expense reports to cover his personal purchase of ammunition, clothing, gift cards and travel to a Major League Baseball All Star game.

According to the prosecutor’s sentencing memo, Hess admitted his involvement when JCI discovered the scheme, but claimed it started in 2008 and that he only received half of the money. He did agree to make a voluntary restitution payment of $2.3 million before the criminal case was filed. He’s agreed to pay another $680,000 in restitution.

Hess’ cooperation led the government to seek a sentence below federal sentencing guidelines, which called for 51 to 63 months of imprisonment. Prosecutors and Hess’ attorney asked for a 33 month sentence.

 

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