According to Bharara and FBI officials, Fallon, a computing consultant, was involved in an embezzlement scheme with James J. Shea of Paramus, NJ, who was an executive vice-president at an international insurance company.

In all it is alleged Fallon was paid $2.6 million and funneled $1.8 million of it back to Shea. Shea spent the money on a multi-million dollar house and luxury automobiles, officials said. They did not describe what Fallon did with his cut.

Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation ("FBI"), unsealed today charges against JAMES J. SHEA and EUGENE FALLON on wire fraud charges stemming from a scheme to embezzle approximately $2.6 million from a large international insurance company where both worked. In perpetrating the scheme, SHEA, an executive at the company, forged the signature of his supervisor to authorize numerous payments to bogus consulting companies that FALLON controlled. FALLON then returned more than two-thirds of the proceeds of the fraud to SHEA, who used the money to purchase a multi-million dollar house and luxury automobiles. SHEA was arrested this morning and is expected to be presented today before United States Magistrate Judge Gabriel Gorenstein. FALLON remains at large.

U.S. Attorney Preet Bharara said: "Together, James Shea and Eugene Fallon allegedly developed a scheme to defraud the company for which Shea worked, and Fallon consulted. Both allegedly exploited their positions and their relationship for pecuniary gain, netting some $2.6 million in the process. Such alleged illegal siphoning of a company's money has no place in any industry, and our office is committed to holding these individuals accountable for their alleged actions."

FBI Assistant Director-in-Charge Diego Rodriguez said: "As alleged, Shea and Fallon conspired to created fake contracts for payouts from a legitimate company and split the proceeds. Today, they face charges for their alleged fraudulent activities. The FBI will continue to work with our law enforcement partners to investigate and bring to justice those who seek to profit from deceptive actions."

From January 2012 through December 2013, SHEA and FALLON engaged in a scheme to embezzle approximately $2.6 million from SHEA's employer, the North American subsidiary of an international insurance company ("Company-1"). SHEA, who rose to the title of Executive Vice President at Company-1, was responsible for the integration of the information technology systems of subsidiaries of Company-1. In that capacity, SHEA oversaw the use of third-party consultants, one of whom was FALLON beginning in or about 2010. According to Company-1's policies and practices, the CFO of Company-1 could personally authorize and approve any third-party vendor contracts up to $1.5 million.

In 2012, SHEA forged the signature of Company-1's CFO on contracts between Company-1 and two purported consulting companies controlled by FALLON (the "Consulting Companies"). According to the contracts that outlined the sham engagement between Company-1 and the Consulting Companies, the Consulting Companies were primarily tasked with providing Company-1 with assistance in integrating the technology systems of Company-1. For a total of 17 months of work, the agreements required Company-1 to pay the Consulting Companies more than $2.6 million. In fact, the Consulting Companies did no work for Company-1.

Beginning in August 2012, and continuing through February 2013, FALLON submitted fraudulent invoices on behalf of the Consulting Companies to Company-1 for consulting work that was not performed. On behalf of Company-1, SHEA then authorized payment for the invoices in the amount of approximately $2.6 million to bank accounts that were controlled by FALLON. Of the approximately $2.6 million that SHEA and FALLON embezzled, more than $1.8 million was routed back to SHEA, while FALLON kept the remainder. SHEA used the majority of his fraudulent proceeds to purchase a multi-million dollar house and two luxury cars.

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SHEA, 49, of Paramus, New Jersey, and FALLON, 51, of Nanuet, New York, are both charged with one count of conspiracy to commit wire fraud and one count of wire fraud. Both counts carry a maximum sentence of 20 years in prison, and a maximum fine of $250,000, or twice the gross gain or loss from the offense. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the work of the Federal Bureau of Investigation.

Today's announcement is part of efforts underway by President Obama's Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Since the inception of FFETF in November 2009, the Justice Department has filed more than 12,841 financial fraud cases against nearly 18,737 defendants including nearly 3,500 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.

This case is being handled by the Office's Securities and Commodities Fraud Task Force. Assistant U.S. Attorneys Daniel S. Goldman and Michael Ferrara are in charge of the prosecution, and Edward Diskant is in charge of the forfeiture aspects of the case.

The allegations contained in the Complaint are merely accusations, and the defendants are presumed innocent unless and until proven guilty.