Man pleads guilty to defrauding

A Newport Beach man could be sentenced up to 63 months in federal prison, depending on his criminal past and if he accepts his responsibility for defrauding two companies out of nearly $3 million, federal court records show.

Mitchell Keith Kleinman, 45, pleaded guilty in the U.S. District Court’s Charlotte division in North Carolina last month to conspiracy and money laundering for his part in a scheme to overbill Georgia Pacific, a manufacturing company out of Atlanta, and Hickory Springs Manufacturing Co. out of North Carolina.

According to Kleinman’s plea agreement, he, William Lee Hagood of North Carolina and Alan Philip Bellanca of San Juan Capistrano worked as executives for three companies, each with a role in approving contracted services.

Prosecutors claim that as the director of information technology for both manufacturing companies, Hagood had his two accomplices, Kleinman and Bellanca, inflate, misrepresent or just flat-out invent services their companies performed for Hagood’s businesses. Hagood would pass on the bill to his company, who would pay it out to either Kleinman or Bellanca. Hagood would then get a kick back from the men, according to court documents.

Prosecutors allege Hagood charged the two companies nearly $3 million altogether, with Kleinman’s companies responsible for a large part of those charges. Kleinman pleaded guilty Nov. 9.

Federal sentencing guidelines show that Kleinman should be sentenced to between 51 and 63 months in federal prison, though the judge makes the final determination and can take the defendant’s criminal history into account.