Ex-CEO of Latex International Sentenced For Embezzlement

The United States Attorney for the District of Connecticut announced that Kevin Coleman, 51, of Waseca, Minn., was sentenced today to 70 months of imprisonment, followed by three years of supervised release, for embezzling approximately $1.7 million from his former employer and for failing to pay more than $740,000 in federal taxes on both his legitimate and embezzled income.

According to court documents and statements made in court, from approximately November 2005 to December 2010, Coleman was employed at in Shelton as its Chief Executive Officer. From approximately October 2008 to November 2010, Coleman and Joanne Osmolik, who served as the company’s vice president for human resources, embezzled approximately $3.5 million in corporate funds to pay personal expenses. As part of the scheme, Coleman and Osmolik charged substantial personal expenditures on corporate credit cards.

The investigation of this matter revealed that Coleman used a corporate credit card of a Latex International subsidiary to charge hundreds of thousands of dollars in diamond jewelry at a Minnesota jeweler, tens of thousands of dollars at Harley Davidson, and hundreds of thousands of dollars at other merchants.  Coleman also directed Osmolik to charge personal items to the corporate American Express card of another employee in order to conceal their expenses from the company’s finance department. These expenses included tens of thousands of dollars in personal travel for Coleman and his family.

Coleman also instructed Osmolik to destroy company records so as to conceal their fraudulent nature from others at Latex International. Osmolik carried out those instructions and destroyed the records.        

Through this scheme, Coleman embezzled approximately $1.7 million from Latex International and Osmolik embezzled approximately $1.77 million.

Coleman also failed to file federal income tax returns for the 2007 though 2010 tax years. During these four years, in addition to his embezzled income, Coleman earned a total $1,585,128 in wages from Latex International, resulting in a tax loss to the government of $741,029.

Judge Stefan R. Underhill ordered Coleman to pay restitution of $1,700,459 and an additional $450,000, jointly and severally with Osmolik, to compensate Latex International for legal fees and other costs it incurred as a result of this crime.  Coleman also was ordered to pay back taxes, interest and penalties in the amount of $1,372,711.66.

On February 27, 2012, Coleman pleaded guilty to one count of wire fraud and one count of tax evasion.        

Osmolik, of Newtown, previously pleaded guilty to one count of wire fraud and, on April 26, 2012, she was sentenced to 48 months of imprisonment and ordered to pay full restitution to Latex International. She also has forfeited her interest in three residential properties in Vermont, six motorcycles, an all-terrain vehicle, four snowmobiles, vehicle trailers, jewelry and numerous appliances and other home furnishing items.        

In addressing the Court, the current Chief Executive Officer of Latex International stated that financial constraints due to the theft has directly caused 43 employees to lose their jobs.        

This matter was investigated by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigation, with the assistance of Latex International.  The case was prosecuted by Assistant United States Attorney Eric J. Glover.