Bellevue man sentenced to prison for defrauding his employer with deceptive insider sales of used medical equipment
Seattle – A former manager of a Snoqualmie, Washington medical device company was sentenced today in U.S. District Court in Seattle to 14 months in prison for his scheme to defraud his employer of nearly $800,000 in used equipment sales, announced Acting U.S. Attorney Tessa M. Gorman. Arunkumar Singal, 42, pleaded guilty to wire fraud on January 3, 2020. At the sentencing hearing U.S. District Judge Richard A. Jones told Singal, “You put everything at risk for one thing: to add to your wealth….. You stopped because you were caught by law enforcement, but you continued to lie and deceive.”
According to records filed in the case, in 2014 Singal was the Director of Global Product Support at Spacelabs Healthcare Inc. The company was established in the 1950’s to make medical monitoring devices to astronauts and then expanded their business to include medical monitoring devices for hospitals and clinics. Singal was put in charge of a new initiative to resell used equipment. But instead of selling the equipment to the highest bidder as he was supposed to do, Singal devised a scheme to have a Texas company bid on the equipment at a very low price, and then used a shell company Singal himself created to purchase the equipment for a ten percent increase in profit to the Texas company. Singal then turned around and sold the equipment at a much higher price to a Minnesota company. Through this fraudulent scheme Singal made a profit of more than $780,000. Singal used the ill-gotten gain to pay down the mortgage on his luxury Mercer Island home and to buy a Tesla, among other expenditures. The scheme unraveled when tech support workers doing regular maintenance on Singal’s company cell phone reported messages that appeared to indicate side deals not authorized by the company. The company fired Singal and reported potential fraud to the Snoqualmie Police Department who alerted the FBI.
As part of the plea deal, Singal sold the Mercer Island home and paid restitution to Spacelabs of $780,163. However, the harm to the company went beyond the lost income on the sales of the equipment. At the time Singal was stealing from the company, Spacelabs was having to tighten its spending and lay-off staffers. Had it received the true value of the used equipment the financial constraints would not have been so severe.
In asking for a three-year prison sentence, prosecutors wrote to the court, “Singal abused his position of trust and responsibility... When he was placed in a position of increased responsibility, he promptly abused the trust he had been given, devising the scheme to resell Spacelabs’ property for his own personal gain… Singal literally lost no opportunity to wring every ounce of profit from his criminal scheme.”
“People tend to spend lavishly when it's not their money,” said Donald Voiret, Special Agent in Charge, FBI Seattle. “In this case, Mr. Singal's greed cost him not only his reputation, but also his home as well as restitution of hundreds of thousands of dollars. Perhaps most costly however, his selfishness may ultimately cost him his right to remain in the United States.”
Singal is a citizen of India and will likely be deported following his prison term.
The case was investigated by the Snoqualmie Police Department and the FBI.
The case was prosecuted by Assistant United States Attorney Stephen Hobbs.
Department of Justice
Office of the U.S. Attorney
Western District of Washington