Two Executives Charged in Fraud Scheme
|U.S. Attorney’s Office December 29, 2009|
William J. Edwards, First Assistant United States Attorney for the Northern District of Ohio, announced today that charges have been filed against Timothy R. Dunagan and David S. Ekers.
A federal grand jury in Cleveland, Ohio, returned an indictment against Dunagan charging him with one count of conspiracy and 10 counts of money laundering. An information was filed against Ekers charging him with one count of aiding and abetting Dunagan in interstate transportation of stolen property.
According to court records, Dunagan, age 45, resides in Chagrin Falls, Ohio. Ekers, age 50, lives in Avon Lake, Ohio.
The indictment against Dunagan alleges that he and Ekers were former executives of subsidiaries of Park-Ohio Industries Inc. The indictment alleges that Dunagan and Ekers conspired to defraud Park-Ohio and to fraudulently obtain money from that company. The indictment further alleges that Dunagan and others established various business entities, essentially shell companies, and corresponding bank accounts to receive funds that were fraudulently obtained from Park-Ohio and its subsidiaries. The indictment charges that Dunagan and others used multiple business entities in order to conceal and disguise the true nature of these entities.
Specifically, the indictment alleges that these fraudulent entities included Albion Engineering, M.R. Consultants, and Jackson Industrial Development. It is alleged that Dunagan caused fraudulent billings to be submitted to Park-Ohio and its subsidiaries in the names of these various entities, purportedly for services rendered. The indictment alleges that Park-Ohio sustained losses totaling approximately $756,870 as a result of this fraudulent conduct by Dunagan.
The indictment also charges Dunagan with 10 counts of money laundering covering the period from December 2004 through May 2006. These money laundering counts allege that Dunagan made bank deposits, purchased a vehicle, and purchased and constructed real property with the funds he fraudulently obtained.
The information filed against Ekers alleges that he and Dunagan fraudulently obtained $234,750 from a Park-Ohio subsidiary by causing a fraudulent purchase order to be created in the name of M.R. Consultants. Specifically, the information alleges that Ekers caused Ajax Manufacturing company, a Park-Ohio subsidiary, to issue a check to M.R. Consultants for $234,750, on April 8, 2004. The indictment charges that Dunagan subsequently transported that check from Ohio to Arkansas where it was deposited into a bank account.
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 U.S. Attorney John D. Sammon following an investigation by the Cleveland Office of the Federal Bureau of Investigation.
An indictment and an information are only charges and are 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.