PORTLAND, Ore. (KOIN) — A former marketing manager at Nike was sentenced to 31 months in a federal prison Tuesday for perpetrating a scheme to defraud his former employer and a childhood friend, the U.S. Attorney’s Office District of Oregon said in a press release.
Errol Andam, 47, of Beaverton, was given the nearly two and a half year sentence and three years of supervised release after he pleaded guilty back in April to three charges: wire fraud, money laundering and making false statements on a loan application. Andam was also ordered to pay more than $1.6 million in restitution, officials said. The Internal Revenue Service previously seized $212,838 in criminally-derived profit from Andam, an amount also fortified.
Andam worked as a manager in the company’s North American Retail Brand Marketing division where he managed the design, build-out and operation of “pop-up” retail venues, temporary Nike stores located and suited to sports competitions and other special events around the country. He was terminated in 2018 after working at Nike since 2001 at its headquarters in Beaverton, court documents said.
Andam recruited a childhood friend to create a company to design and build the pop-up venues as an independent contractor for Nike in the summer of 2016. He then used his authority as a manager at Nike to ensure that his friend’s company was consistently awarded the contracts for these jobs. Andam assume control of much of his friend’s company’s financial operation, despite having no formal role in the company, managing financial accounts and issuing invoices to Nike.
Andam used an alter ego, “Frank Little,” to conceal his role in the scheme, invoice Nike and manage the contract company’s account with Square Inc., a California-based provider of mobile credit-card-processing services. In 2016, Andam also renewed the lapsed registration of an Oregon based limited liability corporation (LLC) he owned so that he could use the defunct entity as a shell company to funnel the profits diverted from Nike to his friend’s company to accounts under his personal control, officials said.
Andman caused credit-card sales at various pop-up venues around the country to run through card readers associated with a Square account owned by his friend’s company, beginning in September 2016. The proceeds were moved to Square in California then to Andam’s LLC bank account in Oregon. Andams said to both Nike and his friend that the proceeds of these sales were credited against the total amount Nike owed to his friend’s company, but in reality he pocketed the money. As “Frank Little,” Andam invoiced Nike for the full cost of the contracted services.
Nearly $1.5 million in Nike proceeds were diverted and embezzled by Andam for his own use, from September 2016 through December 2018. Andam submitted a fake financial statement from his LLC in support of a residential mortgage loan application in July 2018. The statement falsey reflected $194,000 as revenue checks drawn on a bank account owned by his friend’s business. Without his friend’s knowledge, Andam forged the man’s signature on one of the checks and withdrew much of that money.
On February 4, 2021, Andam was charged by criminal information with wire fraud, money laundering and making false statements on a loan application, to which he pleaded guilty on all three charges on Aprll 12, 2021.
The Federal Bureau of Investigation and the IRS Criminal Investigation collaborated on the case’s investigation. It was prosecuted by Ryan W. Bounds, Assistant U.S. Attorney for the District of Oregon.