Tarrytown steel supplier Elof Hansson USA has been awarded nearly $1.4 million from a former executive it accused of pilfering funds and laundering money.
Elof Hansson USA won the judgment against Edgar Santiago of Park Ridge, New Jersey, following a bench trial in White Plains before U.S. District Judge Vincent L. Briccetti.
Elof Hansson “proved by a preponderance of evidence,” Briccetti ruled Nov. 23, that Santiago converted company funds to himself and violated his duty of undivided loyalty and the faithless servant doctrine.
Elof Hansson sells building products, sourcing steel from China, for example, for customers in the Caribbean. It is a subsidiary of Elof Hansson Holding AB, a Swedish foundation that supports education and financial assistance for needy people.
Santiago was hired in 1989 as a payroll clerk and rose in the ranks to executive vice president. In 2017 he resigned to take a position with a major competitor.
That”™s when Elof Hansson says it discovered financial discrepancies.
In 2015, Santiago had negotiated a verbal contract with DonMetal SRL, the largest importer of steel products in the Dominican Republic. Elof Hansson would source steel from China for DonMetal, according to court records, and pay a commission of $3 per ton to Bolivar Quinones, a Dominican who lived in China and who had never worked for Elof Hansson.
Santiago, as manager of the building materials division, approved commission payments to Quinones, according to court records, for $5 per ton of steel. Quinones then wired back a portion of the commissions from banks in Florida and Hong Kong to Santiago”™s personal bank account in New Jersey.
Santiago “pilfered more than $800,000” from 2015 to 2017, Elof Hansson charged, and Quinones was overpaid by $943,820 in commissions.
Santiago argued that the company sues every executive who leaves for not showing loyalty. He claims that a previous president mismanaged the company, lost nearly $60 million, and then made false claims against him to deflect attention from his own conduct.
He explained wire transfers from Quinones as part of a side business they ran to buy and sell property in New York City.
Briccetti found that Elof Hansson was entitled to $1,039,685, plus 9% interest from June 2017, totaling $1,365,519. He also ordered Elof Hansson to apply for a default judgment against Quinones by the end of the year, for failure to answer charges, or risk having the charges dismissed.
Elof Hansson was represented by Manhattan attorney William D. Hummell. Santiago was represented by Hackensack, New Jersey attorney Joshua M. Lurie and Brooklyn attorney Yevgeny Strupinsky.
I think you mean he diverted funds to himself, not converted.
The actual cause of action is Conversion, but colloquially “diverted” works too.