Fuellgraf Electric Co. of Butler Township is closing after 75 years in business because of the theft of more than $1 million by a former controller who was treated like a son and listed in the will of late company president Charles Fuellgraf, his son Charles Fuellgraf III, said Tuesday in federal court in Pittsburgh.

Fuellgraf addressed the court before the former controller, Paul Harmon, 64, of Pittsburgh, was sentenced to six years in prison and ordered to pay $1.46 million in restitution.

Harmon, who worked at Fuellgraf for more than 40 years, pleaded guilty to a charge of wire fraud in January. His sentence included three years of probation after his release from prison.

“Dad took Paul under his wing,” Fuellgraf said. “He listed him as successor and executor in his will. Paul was treated more like a son than an employee. Paul was my right-hand man.”

Fuellgraf asked for a lengthy prison sentence, leaving that decision to Judge J. Nicholas Ranjan of the U.S. District Court for the Western District of Pennsylvania, who imposed a sentence that he said exceeded sentencing guidelines.

“The guidelines don't go far enough,” Ranjan said. “I see somebody before me that betrayed a trust.”

Like a 'parasite'

He said Harmon acted like a “parasite” on the company's finances.

Using sentencing guidelines, Ranjan said he calculated the sentence to be 33-41 months in prison, noting that he has no previous criminal convictions. Eric Olshan, the assistant U.S. Attorney who prosecuted the case, requested the same sentence.

Ranjan said the sentencing guidelines understated the impact of the loss the company suffered, and the total loss was at least $1 million more than the $1.46 million.

Harmon addressed members of the Fuellgraf family who attended the sentencing and the judge, saying he realized no apology would suffice.

He said he got himself deep into debt and turned to gambling to try to pay it off, but ended up further in debt.

“What I did was unspeakable,” Harmon said.

He said the Fuellgraf family was always respectful to him, and he enjoyed the years he worked for the company.

“I got myself in debt and didn't know where to turn,” Harmon said.

He said his two daughters and his brothers won't talk to him, and he hasn't seen his granddaughters in a year and a half because of his actions.

His attorney, Lyle Dresbold, asked the judge to sentence Harmon to probation, saying he is unlikely to commit the same type of crime again and would never again be placed in a position of trust.

Fuellgraf said his grandfather hired Harmon.

Much later, in 2004, the company expanded into Florida, and Fuellgraf said he was comfortable leaving Harmon in charge of operations in Butler while he was busy with the expansion.

Examples of thefts

He recounted numerous examples of thefts from the company that he attributed to Harmon.

He said Harmon used $200,000 in Fuellgraf funds to start a company called PM Accounting.

Through his own investigation, Fuellgraf said he learned Harmon made $1 million in wagers at Rivers Casino in Pittsburgh and made a total of $3.3 million in wagers over the years using company money.

He said Harmon, who had free access to a home he owns in Florida, made a $25,000 deposit on a house using company funds.

Unauthorized wages, benefits, taxes and insurance totaling $160,000 paid to Harmon is not recoverable, Fuellgraf said.

He said $28,000 in union benefits due to other employees was withheld by Harmon to advance his scheme.

Fuellgraf said he borrowed money to try to keep the company afloat, but the company is closing after 75 years in businesses because of the losses.

“All my retirement (savings) has been taken. I can't pass anything on to my children” Fuellgraf said.

He said a sentence of probation would be too lenient and a slap in the face to the family.

Stole funds

Between at least October 2009 and his termination in December 2018, Harmon admitted stealing funds in a variety of ways, including by causing the company to issue more than $470,000 in duplicate or inflated payroll disbursements to Harmon, initiating electronic payments toward his personal credit card balances totaling approximately $500,000, issuing approximately $10,000 in corporate checks to pay his personal credit card balances, issuing almost $80,000 in corporate checks to himself, and misappropriating $200,000 in corporate checks written to cash, according to the U.S. Attorney's office.

Harmon concealed his misappropriation by creating hundreds of false entries in Fuellgraf's books and records that masked the true nature and purpose of the expenditures, the U.S. Attorney's office said.

Harmon has 14 days to appeal the sentence.