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Former Cast-Crete controller pleads guilty to stealing millions

TAMPA—The former corporate controller of a company started by the late Ralph Hughes, a prominent Republican power broker, pleaded guilty in federal court Wednesday to embezzling millions from his employer.

Franklin R. Derochemont, 58, who admitted mail fraud and tax evasion, stole more than $5.3 million from Cast-Crete Corporation, a construction products company, between October 2003 and December 2008, according to the government.

He sent checks for phony accounting and sales tax services to an unnamed accomplice, a certified public accountant not employed by Cast-Crete, the government says. The accountant then paid him kickbacks, which Derochemont used for personal purposes, including the payment of credit card bills.

According to the federal complaint, Derochemont did not pay taxes on the embezzled funds between 2006 and 2008.

In 2008, for example, he reported his income as $205,499, paying $52,853 in taxes; in reality, his income was $828,661 and he owed $267,141 in taxes. Over the three-year period, Derochemont received more than $2.4 million in income and ought to have paid taxes totaling more than $775,000.

He began working at Cast-Crete, earlier known as Florida Engineered Construction Products Inc., in 1979 and was discharged this year.

As part of the plea agreement, he agreed to forfeit the money he misappropriated and to cooperate with the government in related investigations.

Last year, the Internal Revenue Service filed claims against the estate of Hughes, an antitax crusader and political campaign financier, alleging that Hughes and Cast-Crete owed $300 million in corporate and income taxes and penalties.

Hughes' company had not filed federal corporate income tax returns or made payments from 2003 to 2007, authorities said.

An advocate of smaller government, Hughes spent hundreds of thousands of dollars supporting conservative causes and backing candidates who shared his views. He died in 2008 at the age of 77.

That same year, Hillsborough County Commissioner Jim Norman suggested naming the Moral Courage Award for Hughes. Critics protested, saying Hughes bought government support for a pro-growth agenda.

In July, after news of Hughes' tax problems broke, his family asked the commission to remove his name from the award.

Derochemont will be sentenced in 30 to 90 days, said Steve Cole, spokesman for the U.S. Attorney's Office. Mail fraud carries a maximum 20-year prison sentence, while the maximum sentence for tax evasion is five years. Each count includes a fine of $250,000.

Nandini Jayakrishna can be reached at (813) 226-3383 or njayakrishna@sptimes.com.

Former Cast-Crete controller pleads guilty to stealing millions 07/28/10 [Last modified: Wednesday, July 28, 2010 10:37pm]
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