• Tue. Sep 20th, 2022

Former Morton, Illinois man sentenced to more than five years in prison for wire fraud, money laundering and false tax reporting | USAO-CDIL

ByChad J. Johnson

Apr 29, 2022

PEORIA, Illinois – Tampa, Florida man Steven Racich, 49, formerly of the 100 block of West Jefferson, Morton, Illinois, was sentenced on April 27, 2022 to 68 months in prison for wire fraud, money laundering , and make and subscribe a false statement. He was also sentenced to three years of probation. And his sentence included paying $1,912,692.75 in restitution to Apria Healthcare and the Internal Revenue Service.

During the sentencing hearing, the government presented evidence that Racich was an employee of Apria Healthcare, a national company with a branch office in Peoria, Illinois. Apria offers clinical services and sells home medical equipment, including CPAP machines. Racich worked at Apria from 2008 to 2017 and held the position of Branch Manager. During an internal audit in December 2017, Apria officials discovered that the Peoria office was incurring unexplained and excessive shipping charges. The investigation established that Racich was stealing CPAP devices from Apria and selling them to third parties for his own profit, using Apria’s accounts to ship the devices. It was discovered that Racich had set up a business and used an alias to communicate with customers, paying himself through a PayPal account under the alias name. The embezzlement happened as early as 2013 until Racich was fired in December 2017. The fraud netted Racich over $1.4 million in profits. Racich used the illegal funds to support his lifestyle, spending them on plane tickets, vehicle payments and weekend trips. The Internal Revenue Service investigation also uncovered evidence that Racich failed to report income on his taxes, leading to misrepresentation of taxes.

Also in court, U.S. District Judge James Shadid ruled that Racich was eligible for an enhanced sentence because his position as branch manager allowed him to abuse a position of private trust with Apria, which facilitated the commission and concealment of the offence.

Racich was indicted in July 2020 and pleaded guilty in November 2021. Racich has been on bail since his indictment.

The legal penalties for wire fraud are up to 20 years in prison, up to $250,000 in fines and up to three years of supervised release. Penalties for money laundering are up to 20 years in prison, up to three years of supervised release and up to a fine of $500,000 or twice the value of the property involved. Penalties for making and subscribing to a false statement are up to three years in prison, up to $250,000 in fines and one year of probation.

“Each year, the people of the Central District of Illinois fulfill their civic obligation to fund our system of government by paying taxes,” said Assistant U.S. Attorney Katherine G. Legge. “Unfortunately, some shirk this duty or worse, try to profit at the expense of their fellow citizens. Such behavior is not only illegal but unfair. It is our responsibility to hold accountable those who embezzle funds from employers and attempt to cheat the system for personal gain.

“Honest, law-abiding citizens are tired of those who use deception and fraud to line their pockets with ill-gotten money and evade their tax obligations,” said Justin Campbell, IRS Criminal Investigation, Special Agent in Charge, Chicago Field Office. “Mr. Racich’s actions not only caused negative financial harm to his employer, but also to the honest taxpayer when he committed significant offenses of tax evasion, failing to pay taxes on more than 1 .4 million dollars.”

The Internal Revenue Service and Federal Bureau of Investigations investigated the case. Assistant U.S. Attorney Katherine G. Legge represented the government in the prosecution.