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Cyrus R. Vance, Jr.

District Attorney, New York County

For Immediate Release
August 07, 2012

FOUR DEFENDANTS FOUND GUILTY OF DEFRAUDING COLUMBIA UNIVERSITY OUT OF $5.7 MILLION

Manhattan District Attorney Cyrus R. Vance, Jr., today announced the convictions of GEORGE CASTRO, 50, WALTER STEPHENS, JR, 66, and JEREMY DIEUDONNE, 47, for defrauding Columbia University out of approximately $5.7 million and transferring the funds into accounts for their own use. JOSEPH PINERAS, 35, was found guilty of fraud through his access to Columbia’s vendor payment system. A jury found the defendants guilty of all charges in the indictment, including one count each of Grand Larceny in the First Degree, as well as other related crimes. The defendants are expected to be sentenced on September 24, 2012.

“Fraud by insiders against an institution dedicated to the public good is egregious, and will be prosecuted vigorously by this Office,” said District Attorney Vance. “Like so many cyber fraud cases my Office prosecutes, this scheme was set in motion by an ‘insider,’ who made the larger theft of $5.7 million possible. I thank the jury for its diligent service and careful attention in this case.”

As proven at trial, between October 4, 2010, and November 24, 2010, CASTRO, DIEUDONNE, and STEPHENS, with the help of PINERAS, a Columbia University accounts payable clerk, fraudulently redirected a series of payments totaling approximately $5.7 million from Columbia University, payable to New York Presbyterian Hospital, into a TD Bank account registered in the name of IT & Securities Solutions, LLC. That company was formed by CASTRO, STEPHENS was the Chief Financial Officer, and DIEUDONNE was an executive.

CASTRO withdrew more than $800,000 in cash, spent at least $80,000 on a brand new Audi Q7, and spent more than $18,000 on Apple products. At the time of his arrest, CASTRO had more than $200,000 in cash in his possession. CASTRO also sent stolen money to other bank accounts in STEPHENS’ name, and to brokerage accounts controlled by STEPHENS and CASTRO. CASTRO also attempted to direct illicit payments to a bank account in the name of Dieudonne Partners & Co. Inc, a company formed by CASTRO, STEPHENS, and DIEUDONNE. STEPHENS additionally traded on the brokerage account controlled by CASTRO and him, and on the DIEUDONNE account.  In doing so, he lost approximately $400,000.

Assistant District Attorney Kim Han and Assistant District Attorney Marc Frazier Scholl, Senior Investigative Counsel of the Major Economic Crimes Bureau and Counsel to the Investigation Division, handled the prosecution of the case under the supervision of Assistant District Attorney Christopher Conroy, Principal Deputy Chief of the Major Economics Crime Bureau; Assistant District Attorney Polly Greenberg, Chief of the Major Economic Crimes Bureau; Assistant District Attorneys David Szuchman and Patricia O’Connor, Chief and Deputy Chief, respectively, of the Cybercrime and Identity Theft Bureau; and Executive Assistant District Attorney Adam Kaufmann, Chief of the Investigation Division. Trial Preparation Assistants Katherine Savarese and Steven Koch also assisted in the case, as did Investigators Jonathan Reid, Matthew Winters and Deputy Chief Investigator Michael Wigdor of the District Attorney’s Office’s Investigations Bureau.

District Attorney Vance thanked Columbia University, TD Bank and Capital One Bank for providing valuable assistance in this investigation.


Defendant Information:

GEORGE CASTRO, D.O.B. 02/23/1962
Bronx, NY

Convicted:
• Grand Larceny in the First Degree, a class B felony, one count
• Criminal Possession of Stolen Property in the First Degree, a class B felony, one count
• Money Laundering in the First Degree, a class B felony, one count

WALTER STEPHENS, JR., D.O.B. 11/06/1945
Jersey City, NJ

Convicted:
• Grand Larceny in the First Degree, a class B felony, one count
• Criminal Possession of Stolen Property in the First Degree, a class B felony, one count
• Criminal Possession of Stolen Property in the Third Degree, a class D felony, one count

JEREMY DIEUDONNE, D.O.B. 09/29/1964
Lawrence, MA

Convicted:
• Grand Larceny in the First Degree, a class B felony, one count
• Criminal Possession of Stolen Property in the First Degree, a class B felony, one count
• Criminal Possession of Stolen Property in the Second Degree, a class C felony, one count

JOSEPH PINERAS, D.O.B. 09/24/1976
Bronx, NY

Convicted:
• Grand Larceny in the First Degree, a class B felony, one count
• Falsifying Business Records in the First Degree, a class E felony, one count