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Former McKinsey partner gets 2 years for wire fraud

Sun-Times file photo

A former Chicago-based partner at a global consulting firm was sentenced Wednesday to two years in federal prison after he and a client schemed to bilk their companies out of hundreds of thousands of dollars in consulting work they never performed.

Navdeep Arora, a former partner in McKinsey & Company’s Chicago office, plotted with Matthew Sorensen, a former internal consultant for State Farm, to defraud both companies out of consulting fees, according to the U.S. Attorney’s Office for the Northern District of Illinois.

As part of the scheme, which started in 2007, Arora fraudulently took money from McKinsey, State Farm and other clients in the form of work-related travel reimbursements for expenses that were actually run up during personal trips, prosecutors said. Among the trips, Arora and Sorensen traveled to Napa, California and New York City and expensed their flights, hotels, meals, car services and other items to State Farm as business expenses.

Arora and Sorensen had a longstanding business relationship based on Arora’s work overseeing the consulting services his firm provided to State Farm, prosecutors said. In his role, Sorensen provided input and recommendations about whether State Farm should hire outside consultants for company projects and who to retain.

The men used two separate corporate entities to defraud their employers out of the bogus fees, prosecutors said. Sorensen billed McKinsey for the purported work, while Arora allocated the fees to the State Farm projects he was assigned. As a result, McKinsey and State Farm paid $38,265 for consulting services purportedly performed by one of the corporations, and $452,710 in fees billed by the other.

Sorensen, the former chairman of the McLean County Board, pocketed a large portion of the money, while Arora received a substantial salary and benefits from McKinsey for maintaining the company’s business relationship with State Farm, prosecutors said.

Arora, 53 of London, was arrested in 2016 at JFK International Airport in New York after arriving on an overseas flight, prosecutors said. He later pleaded guilty to a single count of wire fraud before being sentenced Wednesday to two years in prison.

Sorensen, of Bloomington, also pleaded guilty to wire fraud, prosecutors said. He was sentenced to over a year in prison in September 2017.