Former Alberta Motor Association executive sentenced to 5 years for fraud

A former executive at the Alberta Motor Association was sentenced to five years in prison on Monday for an $8-million fraud against his former employer.

The AMA vice-president approved fake invoices and funnelled the money into his own accounts

Former AMA vice-president of information technology James Gladden defrauded his employer using a fake-invoice scheme. He was sentenced Monday to five years in prison. (LinkedIn)

A former executive at the Alberta Motor Association was sentenced to five years in prison on Monday for an $8-million fraud against his former employer.

James Gladden pleaded guilty in provincial court earlier this year to one count of fraud over $5,000

Over a three-year period, Gladden fabricated invoices and charged the AMA for work that actually benefited his own companies. Gladden then used the money to buy items such as luxury houses and cars for himself.

The AMA was able to "fully recover the value of the stolen assets," the organization said in a statement posted to its website after the sentencing. About $3 million came from assets recovered from Gladden and the remainder from insurance. 

"We're pleased to learn he pleaded guilty and was sentenced appropriately," the statement said.

"In light of this case, AMA reviewed its processes and put additional controls in place."

Fake invoices approved

Gladden, an Edmonton resident, was first hired by the association in 2008, eventually advancing to the position of vice-president of information technology.

He was authorized to approve invoices for goods and services related to the IT department.

"Gladden approved invoices which caused AMA to make payments of $6,426,768.47 US for goods and services which were never received by AMA," according to an agreed statement of facts signed by both Gladden and the Crown prosecutor.

That worked out to about $8 million in Canadian funds.

The document outlines a number of methods Gladden used to scam his employer. In some cases, Gladden approved invoices for AMA to pay for work actually done for the benefit of his personal company Sprockit Apps Inc.

In other cases, Gladden simply fabricated invoices for the AMA to pay. But the work never occurred and payments were directed to accounts that he ultimately controlled.
Court records show Gladden bought this house in Scottsdale, Ariz., for $520,000 US in March. (Zillow.com)

At one point, Gladden approved a $500,000 invoice to be paid to a company called Datavox Inc. 

"Gladden engaged in email exchanges with AMA employees to develop and maintain the fiction that payments to Datavox were for telephone hardware. In fact, these invoices and the credit memo were fabricated and Datavox had done no business with AMA [or for Gladden]," the statement of facts said.

Lavish life

The money Gladden funnelled from the AMA was used to buy luxury goods, such as two Porsche vehicles, a $500,000 US home in Scottsdale, Ariz., and expensive watches.

During civil litigation, Gladden helped sell some of his assets to pay back the AMA.