Joseph Edward Gallagher, a former CEO from Greenville, has been sentenced to over three years in federal prison for wire fraud. Gallagher, 67, defrauded his company to finance the construction of a personal beach house.
Evidence presented during the sentencing hearing showed that Gallagher was the president and CEO of AFL Telecommunications, a company owned by Fujikura, Inc. Despite earning more than $2 million annually, he devised a scheme to have AFL cover the costs of building his beach house. He created false business documents indicating that EPIC Development Group, LLC was consulting for AFL in government contracts and optical infrastructure. In reality, EPIC was constructing Gallagher's beach house on Kiawah Island.
Gallagher altered invoices submitted by EPIC for construction costs to make it appear as if they were consulting services for AFL. He then submitted these altered invoices for payment. Through this fraudulent scheme, he obtained approximately $2.5 million from AFL for his beach house's construction without EPIC's knowledge of the deceit.
"Gallagher’s actions represent a serious breach of trust. He abused his position of authority diverting millions from his company to fund a personal luxury," stated Acting U.S. Attorney Brook B. Andrews for the District of South Carolina. "This sentence underscores that such brazen acts of fraud, regardless of an individual's status, will be met with serious consequences."
U.S. District Judge Jacquelyn D. Austin sentenced Gallagher to 41 months in prison and imposed a $34,000 fine on him. The issue of restitution will be decided at a later hearing.
The FBI Columbia Field Office investigated this case with Assistant U.S. Attorney Bill Watkins prosecuting.