SAN JOSE – The ex-president and CEO of a Santa Clara-based metal finishing company who improperly used corporate funds to buy jewelry from Tiffany & Co. and lease a Ferrari has been sentenced to 2½ years in federal prison, according to authorities.
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Harry Corl III, 71, of Pittsburg, was also ordered Tuesday to pay $253,625 in restitution to 30 former employees and shareholders, the U.S. Department of Justice said in a news release.
A grand jury indicted Corl on several wire fraud and money laundering counts in November 2018. Last September, he pleaded guilty to conspiracy to commit wire fraud.
From 2008 to 2014, Corl and his estranged wife, Kim Corl, served as executive officers for Nu-Metal Finishing Inc. and trustees of its employee stock ownership plan, prosecutors said in a sentencing memorandum. The plan provided retirement benefits and savings to employees by purchasing and investing stock for their benefit.
The couple, as trustees, had a duty to manage the plan’s cash, stock and assets in the best interest of the employee shareholders, according to prosecutors.
Instead, from 2011 to 2014, Corl used Nu-Metal’s accounts to pay for numerous personal expenses, prosecutors said. For example, Corl used corporate funds to purchase jewelry from Tiffany & Co. and make lease payments on a Ferrari 599 GTB.
Corl also used funds to lease a Bentley and purchase a Mercedes-Benz S63, according to prosecutors.
In May 2014, the couple arranged the fraudulent sale of Nu-Metal, prosecutors said. They represented themselves as the sole owners of the firm, telling the buyer the employee stock ownership plan had been terminated and was no longer a concern.
The plan and another shareholder, however, owned more than 50% of Nu-Metal’s outstanding stock and were owed their corresponding portion of the sale proceeds.
Corl transferred nearly all of the sale proceeds to his personal accounts and moved. To date, the employees who participated in the plan have not received any portion of the proceeds, according to prosecutors. They were all laid off after the sale.
In a sentencing memorandum, Corl’s attorney, Carleen Arlidge, said her client is “now impoverished and in ill health.” Arlidge urged the court to sentence Corl to no more than two years in prison.
“Mr. Corl has no money, no assets to speak of and no possibility of acquiring funds in the future,” Arlidge said.
In addition to the 2½-year prison term and restitution, U.S. District Judge Edward J. Davila ordered Corl to serve three years of supervised release and pay a $100 special assessment fee.
Corl is scheduled to begin serving his prison term on June 13, according to prosecutors.
Kim Corl pleaded guilty to conspiracy to commit wire fraud in April 2022. Davila sentenced her to 13 months in federal prison and three years of supervised release.