Culture of Trust
Rocked by a $36-million embezzlement scheme, PBS&J finds the same corporate culture that got it into trouble may help it weather the storm.
In 2002, DeLoach was named to the firm's board of directors. In 2003, he was tapped as board treasurer. That same year, he, Garcia and Licata began to divert money from PBS&J's medical benefits account. Licata opened secret bank accounts and created what auditors describe as a phantom political action committee, "PBSJ PAC." The signatory on the secret accounts was DeLoach, who over two years transferred in millions of dollars from the medical benefits account.
The scheme could not have worked without all three: They collaborated to post unsupported journal entries in the company's ledger and then manipulated the bank reconciliations. Sometimes, they simply deleted fraudulent checks from the statements; at others, they added false deposits to inflate account balances.
Meanwhile, DeLoach continued to climb the corporate ladder. In January 2004, he was named CFO.
In addition to bilking their fellow employees, DeLoach, Garcia and Licata embezzled from clients, including Florida taxpayers. To make up what they were taking out the back door, they created bogus expenses and billed them to clients using general and administrative (G&A) accounts, which charge for project management, administration and overhead. Their manipulation of G&A accounts inflated overhead rates for government contracts.
Prosecutors say the three misappropriated some $36 million. Garcia bought sleek sports cars, Rolex watches and an interest in a local restaurant. Licata bought real estate in Florida and Nicaragua and engaged in high-stakes gambling. DeLoach had a multimillion-dollar home in Aventura and another in the Keys, sports cars and a yacht. His checks written from the phony PBSJ PAC account include more than $125,000 to ProPlayer Stadium, $92,000 to pay his American Express card and $38,000 to Neiman Marcus. He even gave $10,000 to Wake Forest University, where he'd earned his bachelor's degree in accounting.
"They were very generous people," says Cecil Bragg, inspector general for the Florida DOT. "It's easy to be generous with other people's money."