Federal prosecutors charged two metro Atlanta men with fraud for collecting more than $1 million from the Panda Express restaurant chain for supplying non-existent employee recruits.
The U.S. Attorney's office said Friday that Dereck Cyrus, 52, of Lithonia, and Chuck Sandford, 74, of Marietta, were arraigned on charges of conspiracy and mail fraud for the scheme, which affected the restaurant chain’s units across the nation.
The family-owned company, based in Rosemead, Calif., has about 1,900 Asian food restaurants, including several outlets in metro Atlanta.
“Corporate based fraud schemes do have victims and those victims feel its impact,” said David J. LeValley, with the FBI’s office in Atlanta.
Panda Express could not immediately be reached for comment.
According to investigators, Cyrus and Sandford hatched the alleged theft scheme in early 2013, when Cyrus was working as an in-house recruiter for Panda Express.
At the time, Cyrus also owned a recruiting company called Diversified Recruiters, and Sandford owned a similar company called Chuck Sandford Consultants, or CSC, authorities said.
The two men began sending false invoices from their two companies to Panda Express’ bill-paying department for recruiting services, investigators said. But the “vast majority of the job candidates were either fictitious or had never been recruited by Cyrus or Sandford,” investigators said.
Cyrus left Panda Express a couple of months after the scheme began. But the duo continued sending recruiting bills to Panda Express claiming Cyrus was still an employee, until they had collected “well over $1 million” in billings, investigators said.
Meanwhile, Sandford paid kickbacks to Cyrus once Panda Express made the payments, investigators said.
“These defendants allegedly used a false invoicing scheme to line their own pockets,” said U. S. Attorney John Horn.
“Businesses should carefully vet vendors that they do business with to make sure they do not fall victim to these schemes.”