Tesla got defrauded of almost $10 million in embezzlement scheme by a manager, says DOJ

The U.S. Department of Justice announced this week that they charged a former Tesla employee over an embezzlement scheme that might have cost the automaker almost $10 million.

A federal grand jury issued an indictment against Salil Parulekar, a former manager in Tesla’s Global Supply Management group, and he was charged with “nine counts of wire fraud, in violation of 18 U.S.C. § 1343, and one count of aggravated identity theft, in violation of 18 U.S.C. § 1028A.”

According to the indictment, Parulekar was in charge of the relationships with some of Tesla’s suppliers and he “allegedly used his role to initiate a scheme wherein he diverted money owed to one Tesla supplier and caused it to be paid to another supplier.”

The DOJ explains the scheme in more details:

“Parulekar learned in January 2017 that Tesla had terminated its supplier relationship with Schwabische Huttenwerke Automotive GmbH (“SHW”).  At the time of the termination, SHW had only provided a limited number of sample products, specifically, motor pumps, to Tesla.  Parulekar allegedly knew the termination meant that Tesla was withholding future payments to SHW and that Parulekar was not authorized to contravene this decision.  Notwithstanding these facts, Parulekar redirected a series of payments intended for another supplier, Hota Industrial Manufacturing Co., Ltd. (“Hota”), and caused them to be paid to SHW.”

As we reported last year, Hota is a Taiwan-based manufaturer of gears and axles who is working on the Model 3 program. The manager was apparently able to divert payments due to Hota.

Parulekar allegedly achieved that by “falsifying invoices; creating fraudulent accounts payable documents, such as bank account information and wire instructions; and impersonating Hota employees.”

In 2017, Parulekar’s scheme allegedly embezzled about $9.3 million from Tesla. He stopped working at the company last December.

If convicted, the maximum penalty for each count of wire fraud is twenty years’ imprisonment and a $250,000 fine. It’s unclear at this point if Tesla will be able to get the money back.