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 Amex, Wofford's attorney said his client
developed a proposal to sell TravelMaster, which he claimed was analyzed and
supported by Charles River Associates. However, Amex didn't accept it. Their
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.
Amex 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 Inc., 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
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 LLC 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, at press time, 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."
contributed to this report.
Source: The Beat