A former Arrow Electronics executive accused of helping orchestrate a multimillion-dollar fraud scheme told a Colorado federal jury on Monday that he was merely a pawn manipulated by a deceitful CEO intent on salvaging a failing contract — not a criminal co-conspirator.
Michael Vergato, once a vice president at Arrow, is on trial for six counts of wire fraud and aiding and abetting. Prosecutors allege he and Mark Perlstein, the former CEO of database services company Datavail Corp., conspired to invoice Arrow for $1.9 million in fictitious services and pocketed the proceeds. Perlstein has since pleaded guilty and is now testifying against Vergato on behalf of the federal government.
Defense: “Perlstein Is a Professional Liar”
In opening arguments, Vergato’s attorney Morgan L. Steele of Taft Stettinius & Hollister LLP told jurors that Perlstein was a “master manipulator and professional liar” who used Vergato’s trust to advance his own goals, only to later shift blame onto him.
Steele said that Datavail was underperforming on a contract with Arrow, struggling to meet its obligations related to database performance tuning. In desperation to salvage the relationship with Arrow, Perlstein allegedly identified Vergato — a technically skilled and trusted insider — as someone who could help.
With his supervisor’s permission, Vergato began working as a consultant for Datavail. However, according to Steele, Vergato had no knowledge that Perlstein was secretly using his consulting company, Oracle Performance Tuning and Optimization LLC, to embezzle funds from Arrow. She claimed Perlstein was battling substance abuse and sex addiction, and when questions arose about Datavail’s payments to Vergato’s company, Perlstein pinned the scheme on Vergato.
“He quickly realized Mr. Vergato knew what he was doing and he was going to be able to help him with that strained relationship,” Steele told jurors. “None of it tracks back to Mr. Vergato. It all tracks back to the master manipulator, Mr. Perlstein.”
