Paving Company Charged with Wire Fraud

William J. Edwards, United States Attorney for the Northern District of Ohio, announced today that an information has been filed against John Kasmerski and Kaz Paving Company charging them with two counts of wire fraud. Kasmerski, age 44, resides in Kirtland, Ohio, and Kaz Paving Company is located in Garfield Heights, Ohio.

The information alleges that Kasmerski is the owner and operater of Kaz Paving Company, a commercial paving business, which obtained financing of its construction equipment from various finance companies. Count one of the information alleges that, during the period from March 2006 through October 2008, the defendants fraudulently obtained numerous loans by financing nonexistent equipment. The information charges that the defendants created phony purchase invoices and serial number plates which were placed on similar equipment to deceive creditors, and rented equipment and falsely reflected it as having been purchased. As a result, the information alleges that 23 creditors sustained losses totaling more than $4.2 million.

Count two of the information alleges that Kasmerski and Kaz Paving Company entered into an agreement with Prestige Capital Corporation in May 2007. Prestige Capital is a nationwide factoring company which provides nontraditional bank financing for businesses. Prestige Capital purchases accounts receivable and advances their clients a percentage of the face amount of those invoices. The information alleges that during October, November and December 2007, Kasmerski and Kaz Paving submitted eight fictitious invoices totaling more than $2.8 million to Prestige Capital. Prestige Capital, in turn, advanced 70% of those invoices to Kaz Paving Company. The information charges that Prestige Capital lost approximately $670,000 as a result of this fraudulent scheme executed by Kasmerski and Kaz Paving Company.

If convicted, the defendants’ sentences will be determined by the Court after review of factors unique to this case, including the defendants’ prior criminal record, if any, the defendants’ role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant United States Attorney John D. Sammon, following an investigation by the Cleveland Office of the Federal Bureau of Investigation.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.