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From Online Newsletter September 2009

Pool Manufacturer Defrauded of Millions
By John Miles, Pool & Spa News

Two men have been charged in a plot that scammed more than $3.4 million from a fiberglass pool manufacturer in Florida.

Joseph Hooker, formerly a bookkeeper for Blue Hawaiian Products, has been indicted for mail fraud and multiple counts of income tax evasion. His accomplice, Jack Shaw, has already pleaded guilty to similar charges and faces up to 23 years in prison. Shaw previously served 18 months for mail fraud in 1991.

“The two of them were able to set up an account at another bank, [and Hooker] was the inside guy with all the invoices,” said Roger Erdelac, president of the Largo, Fla.-based manufacturer. “I’m not sure it’s the first company they did this with.”

Shaw and Hooker began defrauding Blue Hawaiian in 2001, according to court documents. They executed a scheme where they would deposit checks from dealers made out to Blue Hawaiian Products into a commercial account under the name “Blue Hawaiian Pools and Supplies.” Shaw then purchased cashier’s checks from various banks and turned them over to Hooker, who gave them back to his employer in smaller amounts with the original dealers listed as the remitters on all the checks.

Hooker also is charged with doctoring the original dealer invoices to reflect the lower amounts on the checks.

Hooker’s reputation around the office helped diffuse any suspicions that might have come about during the five years he was skimming off the company’s profits.

“[When] you’re sitting in the same room with someone you’ve known for 10 years, you don’t question [whether he’s] stealing from you,” Erdelac said. “We think we have all the checks and balances in place, but when it’s an inside job, they can study until they find a way.”

The plot was eventually discovered in 2006 by the company, but the IRS and federal prosecutors took nearly three years to research and build a case against the two men before charging them.

Meanwhile, Blue Hawaiian has weathered the storm, opening a new plant in North Carolina in 2007 and maintaining its dealer base. However, the scam has had an adverse effect on the company’s staff, compromising additional wages, benefits and positions.

“My employees were close friends who were really harmed by this. That’s the sad part,” Erdelac said. “Let’s hope [Hooker will] pay for it dearly.”

Phone calls to Shaw’s attorney were not returned by press time. The prosecuting attorney for the federal government also declined comment for this story.

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