The former president and CEO of Nu-Metal Finishing in California was sentenced to 30 months in federal prison for defrauding the company and its employees.
According to the U.S. Attorney's Office in the Northern District of California, Harry Corl III embezzled substantial company funds for luxury cars and Tiffany & Co. jewelry from the Santa Clara company.
Corl was also ordered to pay $253,625.50 in restitution to over 30 victim employees and shareholders, says United States Attorney Ismail J. Ramsey and Klaus Placke, Regional Director of the U.S. Department of Labor’s Employee Benefits Security Administration, San Francisco Regional Office.
Corl, now of Pittsburg, California, was indicted by a federal grand jury in 2018 on several wire fraud and money laundering counts. On September 25, 2023, he pleaded guilty to conspiracy to commit wire fraud, violating 18 U.S.C. § 1349.
According to court filings, from 2008 to 2014, Corl and his estranged wife and co-defendant were executive officers for Nu-Metal Finishing, Inc. They also served as trustees of the company’s Employee Stock Ownership Plan and Trust, or ESOP, which provided retirement benefits and savings to its employees by purchasing and investing company stock for their collective benefit.
Ramsey and Placke say that the Corls had a fiduciary duty as trustees to competently manage the ESOP’s cash, stock, and assets and act in the best interests of the employee shareholders.
“They failed to do so,” the attorneys say.
As outlined in the government’s sentencing memorandum, from 2011 to 2014, Corl used Nu-Metal’s corporate accounts to pay for numerous personal expenses unrelated to the business of a metal finishing company.
“For example, Corl used corporate funds to purchase extravagant jewelry from Tiffany & Co. and made lease payments on a Ferrari 599 GTB coupe, listing Nu-Metal Finishing as a lessee,” Ramsey and Placke say in a statement. “Corl also used corporate funds to lease a Bentley and purchase a Mercedes S63 sedan outright. The Corls flaunted their luxury car collection on social media.”
In addition, the .S. Attorney's Office says that in May 2014, the Corls arranged a fraudulent sale of Nu-Metal. In all formal written agreements and conversations with all parties involved, the Corls represented themselves as the company's sole owners, falsely stating that the ESOP had been terminated and was no longer a concern.
“In reality, the ESOP and another shareholder-owned well over 50% of the company’s outstanding stock and were owed their corresponding portion of the proceeds from the company’s sale,” the statement says. “However, Corl immediately transferred nearly all sale proceeds to his accounts and moved to Texas. To date, the employees who participated in the ESOP, all laid off after the sale of the company, have not received any portion of the sale proceeds owed to them. As indicated in the filed victim impact statements, these victims lost expected retirement income, and some have suffered serious financial distress as a result.”
The Honorable Edward J. Davila, U.S. District Judge, handed down the sentence. He also sentenced Corl to pay $253,625.50 in restitution, serve a three-year period of supervised release, and pay a $100 special assessment fee. Corl will begin serving his sentence on June 13.
Kim Corl pleaded guilty to conspiracy to commit wire fraud in April 2022. Davila sentenced her to 13 months in federal prison and three years of supervised release.
Marissa Harris is the Assistant U.S. Attorney prosecuting the case, assisted by Sahib Kaur. The prosecution results from a four-year U.S. Department of Labor, Employee Benefits Security Administration investigation.
