Sheraton hotel exec gets 5 years in prison for defrauding Penn

The general manager of the Sheraton University City Hotel was sentenced to five years in federal prison on Tuesday for defrauding Penn of over $3 million. 

Kenneth Kapikian, 58 years old, must also pay restitution for the $3,039,383.51 he stole from the University over seven years. In June, he was convicted of six counts of wire fraud and one count of conspiracy for running a kickback scheme with the hotel's chief engineer, Dennis Gagliardi. As part of the scheme, they directed employees to submit false invoices for services the hotel never received. The Sheraton Hotel is owned by the University, according to the sentencing memorandum. 

When contacted on Thursday morning, Vice President for University Communications Steve MacCarthy declined to comment on Kapikian's sentencing.

In 2006, Kapikian and Gagliardi founded a company, Cold Wash Zone, LLC, that installed laundry machines in hotels. According to court documents, they charged the University for services their company did not provide.

Kapikian and Gagliardi also "strong-armed" other vendors into providing them kickbacks as a condition for doing business with the hotel, according to the Dec. 23 sentencing memorandum. 

Gagliardi, who was also convicted in June, is expected to be sentenced next month. 

When asked to comment on Kapikian and Gagliardi's conviction in June, the University released a statement saying "no Penn employees were named in the charges or implicated in the alleged criminal conduct in any way" and that Penn would "vigorously pursue recovery of all losses that have been incurred by the hotel."

This article was last updated on Dec. 24 at 10:42 a.m. 

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