Fourth Individual in Dynus Investigation Sentenced to 15 Months in Prison for Fraud, Tax Crimes
| U.S. Attorney’s Office August 02, 2011 |
CINCINNATI—James Smith, 43, of Lebanon, was sentenced in U.S. District Court today to 15 months’ imprisonment for his role in a scheme to mislead lenders and secure more than $10 million in loans and lines of credit for Dynus Corporation in connection with a countywide fiber optics installation project in Butler County. Smith was also ordered to pay more than $4 million in restitution.
Carter M. Stewart, United States Attorney for the Southern District of Ohio; Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation; and Tracey L. Warren, Acting Special Agent in Charge, Internal Revenue Service Criminal Investigation announced the sentence imposed today by Senior United States District Sandra S. Beckwith.
Smith pleaded guilty on February 16, 2007 to one count of bank fraud and one count of failure to file a federal income tax return.
Smith was president of Dynus and conspired with others to help the company fraudulently secure funds from lenders by signing fraudulent documents and submitting false information to auditors.
The owner of Dynus Corporation, Orlando Carter, 45, of Mason was sentenced on June 9, 2010 to 15 years’ imprisonment and ordered to pay restitution in the amount of $4,927,085. A federal jury convicted Carter on August 18, 2009 of five counts of bank fraud, and one count each of mail fraud, conspiracy to commit mail and wire fraud, conspiracy to commit bank fraud, making false statements to the Small Business Administration, bankruptcy fraud, and making false oaths in a bankruptcy proceeding.
Former Butler County Auditor Mary Catherine (Kay) Rogers was sentenced on July 26, 2011 to 24 months in prison and ordered to pay restitution to National City Bank in the amount of $4 million for conspiracy and filing a false income tax return.
Former Dynus executive Karin Verbruggen, 54, of Loveland, pleaded guilty on February 2, 2007 to one count of bank fraud. She was placed on five years of court supervision beginning in October 2009 and ordered to pay $4,079,459.71 in restitution to Fifth Third Bank.
Stewart commended the FBI and IRS agents who conducted the investigation along with Assistant U.S. Attorney Jennifer Barry and former Assistant U.S. Attorney J. Richard Chema, who prosecuted the cases.