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Sethi directed the creation of two shell companies, Staffing Professionals and KDM Staffing, and transferred DES employees to those entities to avoid the larger workers compensation premiums DES owed as a result of its accident and claims history. In addition, Sethi directed his Chief Financial Officer, Randy Stringer, to shift payroll from job classifications which had a high premium rate to job classifications which had a lower premium rate, such as clerical.
This investigation began after Sethi reported the embezzlement of employee Randy Stringer to the FBI. Randy Stringer was prosecuted, sentenced, and has served his sentence of imprisonment but remains on supervised release. Stringer provided the FBI with documentation of the payroll shifting and the shell corporations.
This case was investigated by the Federal Bureau of Investigation, with the assistance of the Special Investigations Unit at Liberty Mutual. The case was prosecuted by the United States Attorney's Office for the Southern District of Iowa.
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