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November 3, 2004
TOY COMPANY EXECUTIVE CHARGED
WITH EMBEZZLING $1.1 MILLION
The United States Attorney's Office announced that a federal grand jury in San Jose indicted Lawrence B. Teodoro today on five counts of wire fraud. Mr. Teodoro was charged with embezzling, over a four-year period, over $1 million from his employer, Hayward-based Timeless Toys, Inc.
According to the indictment, Mr. Teodoro, 39, formerly of Menlo Park and Atherton, used his position as chief financial officer to steal approximately $1.1 million from Timeless Toys, which creates and markets stuffed "quarter" bears, puppets, and other small toys. Mr. Teodoro did this in part by maintaining a second, secret operating account for the company without the knowledge of the company's founder and chief executive officer, Harold Nizamian. Mr. Teodoro transferred company funds from the secret account to his own personal bank account, and used the stolen money to pay for his own personal expenses and expenses associated with his outside businesses, "Teodoro Ventures, Ltd." and "The Teodoro Group of Companies."
An affidavit in support of a criminal complaint filed in the same matter also alleges that Mr. Teodoro covered up his thefts by repeatedly misleading Mr. Nizamian about the company's financial situation. The scheme was discovered only when the Bank of America, where the "secret" account was held, notified Mr. Nizamian directly (rather than Mr. Teodoro) that the account was overdrawn. Mr. Nizamian, who believed that Mr. Teodoro had closed the Bank of America account two years earlier, became suspicious and began to investigate, ultimately uncovering the scheme.
Mr. Teodoro was arrested in Dallas, Texas on September 21, 2004. He was ordered detained by a federal magistrate judge in Dallas, who found that Mr. Teodoro, a naturalized United States citizen originally from the Philippines, would be a flight risk if released from custody. Mr. Teodoro made his initial appearance in federal court in San Jose on October 21, 2004 and is currently being held in the Santa Clara County Jail. The defendant's next scheduled appearance is tomorrow, November 4, 2004, at 9:30 a.m., for arraignment before the Honorable Richard Seeborg, United States Magistrate Judge.
The maximum statutory penalty for each count of wire fraud in violation of Title 18, United States Code, Section 1343 is five years and a fine of $250,000, plus restitution. However, any sentence following conviction would be dictated by the Federal Sentencing Guidelines, which take into account a number of factors, and would be imposed in the discretion of the Court. An indictment only contains allegations against an individual and, as with all defendants, Mr. Teodoro must be presumed innocent unless and until convicted.
The prosecution is the result of a one year investigation by agents of the Federal Bureau of Investigation. David Callaway is the Assistant United States Attorney who is prosecuting the case with the assistance of Legal Assistant Tracey Andersen.
A copy of this press release and related court filings may be found on the U.S. Attorney's Office's website at www.usdoj.gov/usao/can. Related court documents and information may be found on the District Court website at www.cand.uscourts.gov or on http://pacer.psc.uscourts.gov/.
All press inquiries to the U.S. Attorney's Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay3@usdoj.gov.
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