Former McKinsey partner, McLean County exec face wire fraud charges
CHICAGO (STMW) - A former McKinsey & Co. partner in Chicago, and the chairman of the McLean County Board in downstate Bloomington have been charged with bilking their former employers out of nearly $900,000.
Navdeep Arora, 51, a former partner in McKinsey & Company’s Chicago office, faces eight counts of wire fraud in an indictment filed in U.S. District Court in Chicago, according to a statement from the U.S. Attorney’s office. He was arrested Sunday at JFK International Airport in New York, and ordered held pending his next court appearance.
McLean County Board Chairman Matthew Sorensen, 49, a former internal consultant for State Farm, was also charged with five counts of wire fraud, according to federal prosecutors. Sorensen, of Bloomington, is also the chairman of the McLean County Liquor Control Commission. He is scheduled for arraignment Jan. 11 in Chicago.
A statement from McLean County administrator Bill Wasson said county officials were made aware of the indictment through “media reports” on Tuesday.
“The reports indicate that the indictment surrounds Mr. Sorensen’s tenure with a previous employer. There is no indication that the allegations in the indictment involve Mr. Sorensen’s position with McLean County. We are reviewing this issue with legal counsel and will provide additional comment as appropriate.”
Arora, of London, oversaw various consulting services McKinsey provided to State Farm, according to the indictment. The two men used two companies–Gabriel Solutions and Andy’s BCB–to defraud their employers out of phony consulting fees.
Sorensen billed McKinsey for bogus work performed by the companies, and Arora allocated the fees to State Farm projects, according to the indictment.
McKinsey and State Farm paid $38,265 for consulting services performed by Andy’s BCB, and $452,710 in fees billed by Gabriel Solutions, according to the indictment. Sorensen pocketed the fees paid to Andy’s, and took $370,000 of the fees paid to Gabriel Solutions.
Arora then pocketed more than $400,000 from McKinsey, State Farm and other McKinsey clients in travel and expense reimbursements, according to the indictment. He claimed the costs were for legitimate business purposes, but actually expensed personal trips to Scottsdale, Napa, Vail, Miami, Las Vegas, New York, London, Prague and Munich, among others.
He also received reimbursement for personal expenditures while living in Chicago, including hotel,s dining and theater shows, according to the indictment.
Each count of wire fraud carries a maximum penalty of 20 years in prison and a maximum fine of $250,000, or twice the gross gain or gross loss resulting from the offense, whichever is greater.