Kenneth Kapikian stole over $3 million from Penn while employed as general manager of the Sheraton University City Hotel. 

On Wednesday, two employees at the Sheraton University Hotel pled guilty in Pennsylvania federal court to defrauding Penn of more than $3 million.

Both Kenneth Kapikian, 57, and Dennis Gagliardi, 60, were charged on May 26 with seven counts of wire fraud and one count of conspiracy to commit money laundering, according to a memo released by Patty Hartman, public affairs specialist at the U.S. Attorney’s Office.

According to the same memo, the two men allegedly engaged in a scheme to “fraudulently obtain monies from the University of Pennsylvania” by billing the University for services they never provided to the Sheraton University City Hotel. The hotel is owned by a subsidiary of Penn and is not managed directly by the University.

They also allegedly directed vendors to inflate their bills to the hotel, where the defendants were also employed.

Kapikian, the hotel’s general manager, pled guilty to six counts of wire fraud and and one count of conspiracy to commit money laundering, while Gagliardi, the hotels’s chief engineer, pled guilty to four counts of wire fraud and one count of conspiracy to commit money laundering.

Both men will be sentenced on September 14. Kapikian faces up to 140 years in prison and a $7.8 million fine, and Gagliardi could receive up to 100 years in prison and a $5.7 million fine.

Shortly after the charges were originally brought against the defendants, the University released a statement, which stated that “no Penn employees were named in the charges or implicated in the alleged criminal conduct in any way.”

The statement also said that they “intend to vigorously pursue recovery of all losses that have been incurred by the hotel.”

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