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Nick Chenowth, the former head of Electronic Data Systems Global Sports marketing program entered a minimum-security federal correctional facility in Seagoville, Texas, on Friday to begin serving a 27-month sentence for mail and wire fraud.
Chenowth pleaded guilty last summer to federal charges that he had submitted nearly $1.3 million worth of false expense reports to his former employer. Both sides in the case agree that the bulk of that money was used to supplement the salary of Olympic gold medalist Marty Nothstein, payments EDS officials contend were never authorized by anyone at the $20 billion Texas information management firm.
EDS investigators and federal prosecutors charged that Chenowth had directed another $137,000 for his personal use. Chenowth, however, insisted that despite his “admittedly sloppy management” of marketing funds, the money in question had been used to support the company’s cycling team, supplying equipment and boosting the program’s budget. Chenowth was fired in 1999, later sued by EDS and finally indicted by a federal grand jury.
Chenowth maintained throughout the civil lawsuit, a bankruptcy case and indictment and prosecution on charges of wire fraud, that he was acting with the approval of company officials, though none have since come forward to corroborate his version of events. Chenowth’s immediate supervisor for most of his time at EDS died before the investigation into the charges began.
In an interview Thursday, Chenowth said “in a strange way, the beginning of the sentence is a good thing. I can finally see the light at the end of the tunnel to something that has been going on for nearly the past three years. I know that when I’m out, my wife and I can finally start a new chapter in our lives and try to put all of this behind us.”
The 47-year-old Chenowth said he is still pursuing efforts to be transferred to a federal “boot camp” in Allentown, Pennsylvania, which would allow him to fulfill his sentence more quickly. Assuming, however, that he remains at the facility in Texas, Chenowth will be eligible for parole and transfer to a halfway house in 20 months. A move to the Pennsylvania facility could cut that time in half.
“Allentown is considered to be hard time. A month there counts as two anywhere else,” Chenowth, who has remained an active track cyclist throughout the past three years, told VeloNews. “It’s tough, but I am also more likely to stay in shape there, too.”
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