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Federal authorities originally charged Philip Charles de Gruchy, 63, and Barbara Brown, 66, with conspiracy and mail fraud.
A federal grand jury on Thursday added six counts against deGruchy of “subscribing to false individual and corporate tax returns in 2009 and 2010.”
Barbara Brown was an administrator with Toys R Us in Wayne when, the government says, she steered a contract to CEM Direct Marketing — a fictitious company that investigators said was created by her and her then-husband, Philip Charles DeGrunchy.
From November 2007 through early March 2010, CEM submitted more than 60 invoices for purported consulting work that the then-married couple “either copied from other vendors’ work, was related to other businesses or did not correspond to items on CEM’s invoices,” according to an FBI complaint on file in U.S. District Court in Newark.
CEM had TRU mail checks to various Canadian addresses before they were ultimately deposited at bank branches in Park Ridge.
Checks were then written out of the CEM account payable directly to either de Gruchy or Brown or to Silk Farm and Ontario LLC, companies affiliated with de Gruchy, the federal complaint says.
“Money obtained from the scheme was used for personal purposes, including home renovations, mortgage payments on the Park Ridge residence that Brown and de Gruchy shared, and credit card expenses,” U.S. Attorney Paul J. Fishman said.
Brown left the TRU with a severance following a series of poor performance reviews, court records show.
For 16 months, beginning in July 2010, deGruchy worked for Tumi Luggage in South Plainfield as director of global relations management. While there, he hired Brown for a project without disclosing their relationship, federal authorities said.
From Nov. 4, 2010, through Sept. 22, 2011, the company mailed $216,835 in checks to a Canadian address purporting to belong to Brown or BI Insights, an alleged Canadian company engaged in marketing consulting services and controlled by Brown, the FBI complaint says.
De Gruchy approved all of the invoices, even though “no meaningful work product was furnished,” it says.
“Additional invoices submitted by Brown to [Tumi] totaling $124,150, were not paid after the scheme to defraud was uncovered,” the complaint says.
After discovering that CEM’s website was registered to Brown’s home address, Toys R Us filed suit in Superior Court in Hackensack — and the government investigated.
A supserseding indictment returned Thursday charged DeGruchy with falsely claiming certain business payments that ended up understating CEM’s taxable income by $649,465 for 2009 and 2010. It accused him of doing the same with Silk Farm, understating its taxable income by $377,578 for the same period.
Fishman credited special agents of the FBI’s Newark Field Office and IRS-Criminal Investigations Newark Field Office.
Handling the case for the government is Senior Litigation Counsel Leslie F. Schwartz of Fishman’s office.
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