COSTA MESA : 3 Plead Guilty in Hiring-Fee Scam

A former executive of Digital Equipment Corp. and two others pleaded guilty Tuesday to siphoning nearly $300,000 from the computer company and agreed to repay the money in lieu of a prison term, Costa Mesa police said.

The executive, Steven William Hunt, 43, of Arcadia, and his accomplices, John Francis Mazarella, 54, of Mission Viejo, and Danielle Ann Marie, 42, of Laguna Niguel, were each sentenced to eight years in prison and three years’ probation. They each pleaded guilty to 12 counts of felony grand theft and fraud. The prison sentences, handed down in a Harbor Division courtroom, will be delayed pending repayment of the embezzled funds, Costa Mesa Police Detective Steven R. Labbitt said.

The three were arrested in June after a clerical error revealed that Hunt was falsely steering referral fees to Mazarella and Marie, who had set up bogus executive employment agencies.

Under the scheme, Hunt scanned applications from newly hired employees in high-paying, high-tech positions, Labbitt said. Hunt separated those who had been referred to Digital Equipment Corp. by legitimate executive search firms from those who responded to newspaper advertisements or applied on recommendations from other workers, Labbitt said.

Hunt forwarded information detailing annual salaries and positions of those employees not referred by head-hunting agencies to Mazarella and Marie, Labbitt said. Mazarella, an independent consultant hired to screen employees for Digital Equipment, and Marie, who was not connected to the company, set up a phony employment agency and used the information supplied by Hunt to bill Digital.

“Hunt would receive the invoice and authorize its payment, and it would then go to the finance department,” Labbitt said after the arrest. “They would see his authorization for payment and, because it was his responsibility for processing the invoices, they would cut a check and send it out to any one of the four fictitious businesses (the suspects) had set up.”

Each invoice typically requested 15% of the new employee’s annual salary, which ranged from $50,000 to $80,000, Labbitt said. The suspects allegedly collected fees totaling nearly $300,000 between 1986 and 1989 by claiming that they had referred 30 new employees to Digital.

The amount of restitution to the company will be determined at a hearing next month, Labbitt said.