SCRANTON, Pa. — A federal judge in Scranton ordered a 2½-year prison sentence for a Luzerne County man who embezzled $1.5 million from his former employer to cover his online sports bets, the U.S. Attorney's office for the Middle District of Pennsylvania announced Tuesday.
Lawrence Malachefski, 39, must repay $1,586,557.45 to the company he stole from, which was identified in court filings as Engineered Building Systems, a Wilkes-Barre based heating, ventilation and air conditioning business.
Malachefski worked at the HVAC company as its financial controller. In his role, he initiated money transfers between company and outside accounts.
Prosecutors said he used his position to embezzle more than $1.5 million between March and May 2023. He primarily spent the money by making online sports bets, court filings show.
According to his attorney, Lawrence Kansky, Malachefski underwent treatment for gambling addiction after the thefts came to light.
Efforts to reach EBS executives for comment Tuesday were not immediately successful.
In April, Malachefski pleaded guilty to one count of wire fraud, which carried a potential maximum penalty of 20 years behind bars.
Growing up, Malachefski, of Wilkes-Barre, developed a solid work ethic and a strong sense of responsibility, Kansky said in court filings. Until his "aberrant conduct," Malachefski was well regarded in his field and had no criminal record, Kansky added.
Malachefski, who had been on track for promotion to company chief financial officer, reported himself to his bosses in June last year and cooperated with the investigation, according to the filings.
"Importantly, Mr. Malachefski has been able to voluntarily cease all forms of gambling, through therapy and support groups...to ensure that he never makes such a serious and harmful mistake against anyone, including himself, ever again," Kansky wrote in sentencing memorandum.
In legal filings, Kansky asked U.S. District Court Judge Malachy E. Mannion to impose a 6-to-12-month sentence.
U.S. Attorney Gerard M. Karam's office sought a sentence within the recommended guideline range of 33-to-41-months.
While noting Malachefski's cooperation, Assistant U.S. Attorney Jeffrey St. John argued the Luzerne County accountant still abused a position of trust and caused "significant disruption to the entire company and significant personal grief to the individual owners."
" And while his conduct appears to have been animated and accelerated by a gambling addiction, if Malachefski was not also motivated, at least in part, by greed and the desire to live beyond his means, he’d be the first person in history to steal $1.5 million and spend it all on selfish pursuits who wasn’t," St. John wrote in a memorandum.
Malachefski is paying back the money, Kansky said in filings.
On April 30, he made a restitution payment of $101,649 to the clerk of courts, according to court filings. Malachefski also has a 2023 tax refund of $723,422 that will be applied to his debt. Until his incarceration, he delivered groceries for Instacart to try and make up what he can.
"Larry admits that he is dealing with some demons, but he is trying his best to make things right," wrote a friend to the judge. "I hope you will consider the many good qualities of the man I know before handing down his sentence."
