Tri-Pen Management founder, president and CFO Victoria Wofford Monday was sentenced to two to six years in a New York prison and ordered to pay back $25 million that she fraudulently billed to corporate travel client accounts between 2006 and 2010.
Wofford last May pleaded guilty to billing $17 million in charges to dormant American Express accounts of client L3 Communications, which had outsourced travel management to her company. Wofford stole $8 million, according to news reports, by systematically overbilling a defense contractor client for travel booked through her company.
"I don't know what I was thinking," Wofford told Manhattan Supreme Court Judge Michael Obus at the sentencing. Wofford said she suffered from sleep apnea, but offered that as a "reason, not an excuse" as she apologized and expressed remorse for those hurt. "I plan to do everything I can to find another path to ensure the restitution is paid. I don't know what that is today."
Obus called it a "sad situation. To say you got in over your head might be an understatement. You had to know that this was improper. You had to know you were deceiving the people around you as well. I had hoped that more of the restitution could have been resolved by now."
At sentencing, Wofford's defense attorney, Thomas Puccio, asked for the minimum sentence for the first-degree grand larceny conviction of one to three years.
However, the judge agreed with the lesser of the district attorney's request for at least two to six years and no more than three to nine years of prison.
After two years in prison, Wofford could be eligible to apply for parole. If denied, she would continue to serve and two years later would be eligible to again apply for parole. Should parole be denied both times, the sentence would end after six years.
Sentencing was delayed multiple times since last July as Wofford attempted to sell TravelMaster, a data-management technology, to make some restitution, but no deal was finalized.
Wofford contacted an attorney last February and turned herself into the district attorney's office in early 2010 as American Express bills exceeded $35 million in charges and fees. The judge and attorneys agreed on restitution of $25 million as the amount actually taken.
Court documents indicate that Wofford used most of the stolen funds to support TravelMaster, a start-up software venture she founded to enhance her travel management business.
She used $475,000 to buy in her husband's name an apartment in St. Petersburg, Fla., and provided her husband with $2.4 million to invest in a California restaurant chain, according to records.
At sentencing, prosecutors said Wofford's husband — who didn't know funds were stolen — would repay $1.6 million. Wofford also agreed to sell her Manhattan apartment, but the proceeds are to be used to pay another debt.
To pay back Americn Express, Wofford's attorney said his client developed a proposal to sell TravelMaster, which he claimed was analyzed and supported by Charles River Associates. However, American Express didn't accept it. Its lawyers found "some defect" in the agreement.
"My view: take the bird in the hand," Puccio said.
"I don't want to be critical of the victim here, but if I were AmEx, I would have made this deal to recover monies from the software business," Puccio told the judge.
The effort to sell the technology company was "significant and went above and beyond," he added.
American Express declined to respond to any questions about the case.
At least three companies were interested in TravelMaster, according to sources. Asset purchase and royalty agreements were signed in early January with ViaVerity, according to president Joshua Marrow.
Original term sheets were delivered in October and circulated to all parties, Marrow said. The deal was supposed to close Jan. 28, but when "sufficient terms" weren't met, the close date was postponed until late February.
Despite the efforts of "Tri-Pen, TravelMaster and Wofford, who did everything within their control to meet all terms" of the asset agreement for ViaVerity to purchase TravelMaster, "the terms could not be met," Marrow said. "The deal was unfortunately put to rest. It was not for lack of trying."
Marrow and TravelMaster COO Joe Monaghan refused to say why the acquisition of TravelMaster collapsed.
At its peak, TravelMaster served about a dozen clients and processed more than $1 billion worth of travel, according to Monaghan. Wofford's outsourced travel management firm, Tri-Pen Management, was TravelMaster's single largest client, but the business ended last year as Tri-Pen dissolved.
While the client rosters eroded, Monaghan said, he and five employees "continued to service clients. TravelMaster will cease to do business, but we have protected our clients. A group of employees will continue to service one client, maybe more, through a professional services agreement" to import human resource data and provide it to a third-party profile management tool.
Monaghan said he doesn't "know what happens to the assets, the technology," but TravelMaster ceases to do business.
Now that clients and employees are taken care of, Monaghan said, his "job is to search for whatever my next role is. I love technology and certainly see the value that it brings to the corporate side of the business. I would love to say in this industry, but we'll see what's out there."
While formed to acquire TravelMaster, ViaVerity "is still in existence and may choose to purse other technology products in the travel space," Marrow said. However, Marrow said he had no plans to announce anything.
Funding travel tech ventures doesn't appear to be an issue, according to Marrow.
"There was great enthusiasm on the part of investors to back ViaVerity in this deal."
This report was published Tuesday in The Beat, a sister publication to Travel Weekly.