Cork Pleads Guilty to Diverting Commerce Funds

Ellen C. Wells

Malcomb Cork, former president of Maryland-based lawn and garden distributor Commerce pleaded guilty recently to diverting more than $187,000 in company funds in July 2011. According to the United States Department of Justice, Cork admitted to directing subordinates to transfer $187,500 from Commerce’s operating account to an account in the name of Chemence LLC. This company, which manufactured and distributed products such as a medical-grade adhesive, was owed exactly that much by another company, Medical Solutions, Inc., which just happened to be operated by Cork. Cork previously tried writing a check for that amount from his own investment account, but it was returned due to insufficient funds.

In his plea agreement, Cork acknowledges that his next step, diverting funds from Commerce, was one he was not authorized to direct. And in fact, when Commerce’s CFO asked about the diversion of funds that happened while on vacation, Cork said the funds were transferred to a trade show vendor. Cork is scheduled to be sentenced in February and can face up to 15 months in prison.

Cork’s actions eventually led to Commerce’s filing for bankruptcy and liquidation in 2013, while also taking an enormous toll on Commerce’s vendors and retailer customers. GP