Executives at a New Jersey armored car service that transported cash from banks to automated teller machines allegedly diverted at least $2.5 million in bank funds to payroll expenses, the purchase of season tickets to games of hockey’s Philadelphia Flyers and a personal car, and other illegal uses.

The company, Tri-State Armored Services Inc. of Hammonton, which supplied 3,000 East Coast ATMs, has been shut by federal prosecutors. A former vice president, Daniel Feuker, pleaded guilty March 12 to conspiring to launder more than $1 million in funds belonging to customer banks. A former chief executive officer, William A. Mottin, was arrested March 2 on charges of bank fraud and money laundering.

While the criminal charges against Mr. Mottin specify that he was responsible for thefts “in excess of $1 million” and specifically itemize $2.5 million in thefts, the actual amount may be higher. One bank he allegedly defrauded, Summit Bancorp of Princeton, N.J., said it discovered a $25 million shortage in its FDIC-insured account with Tri-State Armored Services. Prosecutors would not say how many banks were involved in Tri-State’s dealings or exactly how much money was taken. Mr. Feuker and Mr. Mottin are both out on bail, U.S. Justice Department spokesman Michael Drewniak said.

WFSF Financial Corp., parent company of Wilmington Savings Fund Society FSB of Delaware, issued a news release March 20 saying it had also been bilked by Tri-State and that it had taken a first-quarter earnings charge of $450,000 to $650,000 to cover the lost funds. Mark Turner, chief financial officer of Wilmington Savings, said in an interview: “We made several wires in late February, which we understood when they arrived would be delivered to various ATM machines. Several days later, we were informed that the cash did not arrive. That obviously started a number of calls and an investigation.”

Armored car carriers “are a trusted part of the money delivery system,” Mr. Turner said. “This doesn’t happen often. We’re not happy the situation occurred, but we’ve done our best to identify the loss and report it as soon as possible.” Under a plea bargain, Mr. Feuker, 43, pleaded guilty in federal court to one count of conspiracy to launder monetary instruments. He faces a maximum of 20 years in prison and a $500,000 fine. Sentencing is scheduled for June 25.

As part of his plea, Mr. Feuker said he stole from Tri-State’s bank customers at the direction of his boss, Mr. Mottin. He claims that Mr. Mottin told him to use the money to keep Tri-State solvent, cover payroll shortfalls, buy new vehicles for the company fleet, and buy various personal items for Mr. Mottin. Mr. Feuker admitted that between 1998 and 2000 he made at least 140 cash deposits, worth more than $1.6 million, to his personal accounts or Tri-State accounts using money from a Tri-State vault. He also admitted that he used some of the money for himself — to buy hockey tickets, dinners, and a car.

Mr. Mottin and others bought the armored car company in October 1997 from Barry Chesla. Federal prosecutors are probing the business dealings of Mr. Chesla, who had operated the company as Executive Cash Services Inc.

Edward J. Bilik, Mr. Chesla’s lawyer, said that this investigation “focuses on Mr. Chesla separately. I won’t even confirm that it involves Tri-State.”

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