Hudson man accused of embezzling from company

A Hudson man is accused of embezzling thousands of dollars from a company offering educational trips for students.

A Hudson man is accused of embezzling thousands of dollars from a company offering educational trips for students.

A federal grand jury indicted 45-year-old Joseph A. Cipolletti of Hudson on charges of wire fraud, money laundering, bank fraud and making a false statement.

According to the U.S. Attorney’s Office for the Northern District of Ohio, Cipolletti was vice president of Mayfield Village-based Discovery Tours. The business offered educational trips for grade school and high school students to destinations such as Washington, D.C., Chicago, New York City, Columbus and Gettysburg, Pa.

These trips took place via coach bus and included transportation, hotel accommodations, meals, sightseeing admissions and security. Cipolletti’s responsibilities included managing the organization’s finances, cash withdrawals, general ledger entries, accounts payable, accounts receivable, payroll, taxes and the defendant had signature authority on the business bank accounts.

Federal prosecutors allege that from June 2014 to May 2018, Cipolletti devised a scheme to divert payments intended for these trips for personal use. He allegedly defrauded parents and other student trip purchasers, and embezzled funds meant for school trips to spend on items such as home renovations and personal vehicles. Overall, he is alleged to have embezzled approximately $609,942 from the business.

Cipolletti is accused of taking many actions to further the scheme, including making multiple false entries in the Discovery Tours general ledger claiming embezzled funds were trip-related expenses, forging an email to a hotel vendor claiming that the business suffered a loss of $236,022.27 due to a hacked account, paying vendors for previous student trips with deposits from future trips, and obtaining high interest loans to conceal his actions. The high interest on these loans ultimately led to Discovery Tours eventual bankruptcy filing.

Authorities allege that in one instance, on or about May 19, 2016, a hotel vendor sent the Cipolletti an email stating that payment for a previous school trip had not been made and was overdue. The hotel vendor informed him that because of this delay in payment, the business would be required to prepay for future events. The hotel vendor told him that if payment in full for the hotel accommodations was not received by a specific time and date, then the next student group would not be permitted to check-in.

On or about two days later, allegedly knowing that his organization’s business account did not have sufficient funds, Cipolletti issued five checks totaling $72,540, payable to the hotel, and had an employee travel in interstate commerce from Ohio to Virginia to hand deliver the checks to the hotel. All the checks were returned for insufficient funds.

It’s alleged that because of Cipolletti’s action Discovery Tours abruptly ended operations on May 7, 2018 and filed for bankruptcy in United States Bankruptcy Court for the Northern District of Ohio. Student trips to Washington, D.C. were canceled for dozens of schools across Ohio and more than 5,000 families lost the money they had previously paid for trip fees.

Just days before Discovery Tours filed for bankruptcy, a Mentor Schools

“This defendant is accused of embezzling thousands of dollars from hardworking Northeast Ohio families, intended to provide their children and students with meaningful educational experiences, for his own personal use – such as buying vehicles and backyard renovations.” — U.S. Attorney for the Northern District of Ohio Justin Herdman

trip to Washington, D.C. for 500 eight students was abruptly canceled. The trip was scheduled to take place from May 2 to May 4. Schools Superintendent William Porter said at the time they learned of the cancellation late in the afternoon May 1.

“We immediately contacted the hotel to try to get more information,” Porter said in a statement at the time. “We were told by hotel management that, under advice from the hotel’s legal counsel, all they could disclose to us is: Discovery Tours was unable to meet the contractual obligations. Discovery Tours tells us otherwise.

“Regardless, even if we were able to secure the hotel rooms directly through the hotel ourselves, we no longer have faith in Discovery Tours to trust them with our most precious cargo — our students — to feel comfortable to continue on this trip, especially with such little time before tomorrow morning.”

Chardon and Riverside schools were among those affected by Discovery Tours’ abrupt end.

“This defendant is accused of embezzling thousands of dollars from hardworking Northeast Ohio families, intended to provide their children and students with meaningful educational experiences, for his own personal use – such as buying vehicles and backyard renovations,” U.S. Attorney for the Northern District of Ohio Justin Herdman said in a statement. “As a result of the defendant’s alleged actions, his place of business was forced into bankruptcy, and our community’s schoolchildren were deprived of invaluable experiences and memories.”

Cipolletti is also alleged to have knowingly made false statements under oath regarding Discovery Tours’ bankruptcy status during a hearing in federal bankruptcy court. He claimed that he did not owe his business any money when he had allegedly embezzled $609,942 from the business and made false entries in the general ledger.

The investigation was conducted by the Cleveland Division of the FBI and Akron Resident Agency. The Geauga County Prosecutor’s Office was among the agencies that helped with the investigation.

“I am appreciative of the efforts of the U.S. Attorney’s Office to obtain an indictment in this matter,” Geauga County Prosecutor James L. Flaiz said in a statement. “Our office was the first to initiate the investigation into Discovery Tours following a complaint from the Chardon School District. U.S. Attorney Justin Herdman has been a great partner with Geauga County law enforcement in this case and others.”