Former CFO pleads guilty in federal court to embezzling millions from former employer

An Arizona man pleaded guilty on Monday to one count of wire fraud after being accused of embezzling over $3 million from his employer, according to a news release from U.S. Attorney Andrew Luger.

David Efrem Katz, 56, was the former CFO of Minnesota-based Durand and Associates — a property management company specializing in servicing homeowner associations. Court officials allege that Katz embezzled over $3 million from Durand and Associates and its client homeowners associations between 2012 and 2017.

As CFO, Katz was authorized to open credit cards in the company’s name and use them for business expenses. Court officials allege that he used this to reimburse himself for personal expenses and business expenses he never actually incurred. He paid himself $6,000-$10,000 in reimbursements every two weeks.

Katz labeled these payments as miscellaneous earnings and reimbursements, “recovery loans,” bonuses and commissions, but court officials said he never loaned or invested money into the company that he was entitled to “recover.”

He did earn bonuses and commissions and incur business expenses, but the total was significantly less than the amounts he paid himself, according to court officials.

He was also responsible for payroll and paid himself significantly more than his agreed-upon salary, court officials said. He paid himself $6,500 every two weeks as a salary despite his base salary being $47,500 annually.

This case is the result of an investigation by the FBI.

A hearing will be scheduled at a later date.