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Discovery Tours vice president indicted for allegedly embezzling $610k from company

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Posted at 5:27 PM, Jul 24, 2020
and last updated 2020-07-24 17:27:59-04

CLEVELAND — The vice president of a tour company that folded two years ago, canceling school trips to Washington D.C. and raising the ire of parents and school officials, has been indicted on federal charges for allegedly embezzling more than half a million dollars.

According to the U.S. Attorney’s Office, Joseph A. Cipolletti, 45, of Hudson, is facing an 18-count indictment charging him with wire fraud, money laundering, bank fraud and making a false statement.

In 2018, the family-run Discovery Tours Inc. collapsed, prompting the sudden cancellation of school trips for dozens of districts across Ohio.

“When these families paid for a trip, fraud wasn’t on the itinerary,” said Ohio Attorney General Dave Yost. “This business owner didn’t keep his word, so now his next destination will be the courthouse.”

Families of the students who were set to go on the Washington D.C. trip had paid as much as $500 to reserve their child’s spot. The sudden insolvency of Discovery Tours Inc. put area school districts in a bind as some opted to use public money to diffuse the loss, while others tried to help families through private donations.

“This defendant is accused of embezzling thousands of dollars from hardworking Northeast Ohio families, intended to provide their children and students with meaningful educational experiences, for his own personal use – such as buying vehicles and backyard renovations,” said U.S. Attorney Justin Herdman. “As a result of the defendant’s alleged actions, his place of business was forced into bankruptcy, and our community’s schoolchildren were deprived of invaluable experiences and memories.”

From June 2014 to May 2018, Cipolletti allegedly embezzled money for his personal use and then later claimed the embezzled money was for trip-related expenses. Authorities allege that he cooked the books and made false entries in the company's ledger.

The attorney's office states that the total amount Cipolletti allegedly embezzled was nearly $610,000.

Authorities said Cipolletti tried to conceal his actions through various means. At one point, he sent a fraudulent email to a vendor claiming that his business was “hacked” and lost more than a quarter-million dollars. He’s also accused of paying vendors from previous trips with deposits for future trips that hadn’t taken place yet. He took out high-interest loans to further hide his activities.

Those loans later caused Discovery Tours to file bankruptcy. Dozens of school trips to Washington D.C. were canceled and thousands of families lost the money they paid for the trips. All in all, around 5,000 families lost money, authorities said.

In May 2016, a hotel vendor sent Cipolletti an email stating that the company was overdue a payment for a prior school trip and if not paid for the next scheduled group would not be allowed to check in, authorities said. Cipolletti allegedly issued five checks that totaled $72,540 and had an employee drive them out of state to Virginia to give them to the hotel. The checks were returned due to insufficient funds.

“This individual is a typical con man,” said Cuyahoga County Prosecutor Michael O’Malley. “He took money from parents and never intended on fulfilling his obligations.”

News 5 previously reported that in Chapter 7 bankruptcy petition, Discovery Tours claimed it had nearly $4 million in liabilities compared to roughly $1.3 million in assets. The company listed more than 5,000 creditors.

“The fraud perpetrated by Mr. Cipolletti stole money from hardworking families and school districts. The scheme deprived students of annual trips that have become a tradition and provide a lifetime of memories,” said Special Agent in Charge Eric B. Smith. “Great work by partner agencies including the Summit County Prosecutor’s Office, the Geauga County Prosecutor’s Office, and Ohio BCI, laid the initial groundwork for the FBI and the USAO to obtain this federal indictment. We will continue to work with partners throughout Northeast Ohio to seek justice for the communities we serve.”

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