Hungarian Citizen Who Engaged in $600,000 Fraud Scheme is Sentenced

Nora R. Dannehy, United States Attorney for the District of Connecticut, announced that ATTILA B. KNOTH, 49, a citizen of Hungary formerly residing in Hartford, was sentenced today by United States District Judge Christopher F. Droney in Hartford to approximately nine months of imprisonment, time served, for defrauding two banks and a finance company of nearly $600,000 in 1997. Judge Droney also ordered KNOTH to pay a fine in the amount of $10,000. On June 29, 2009, KNOTH pleaded guilty to one count of bank fraud and one count of wire fraud stemming from the scheme.

According to documents filed with the Court and statements made in court, in 1997, KNOTH owned and operated a dental laboratory, Interdental Studio, located for a time at 810 Maple Avenue in Hartford and later at 333 Pleasant Valley Road in South Windsor. In pleading guilty, KNOTH admitted that he defrauded Fleet Bank (now Bank of America), and Webster Bank by submitting false financial information to the financial institutions to induce them to loan to him and Interdental Studio a total of $275,000, purportedly for working capital and cash flow management. Instead of using the money for working capital, KNOTH wire transferred a significant portion of the money he received from the banks to an account held by him at Swiss Bank Corporation in Zurich, Switzerland, and failed to repay the victim banks.

KNOTH also provided false information to Matsco Financial Corporation, a California-based equipment financing company. Based on that information, Matsco provided KNOTH with approximately $300,000 in financing for the purchase of dental equipment, cabinetry, office furnishings, and improvements to the Interdental laboratory in South Windsor. Over the 1997 Thanksgiving holiday weekend, KNOTH moved the dental equipment, cabinetry and office furnishings from the South Windsor location to an unknown location, and failed to repay Matsco.

On May 22, 2002, a federal grand jury sitting in New Haven returned a six-count Indictment charging KNOTH, whose whereabouts were unknown at that time. In late October 2008, KNOTH was located in Germany and detained by German authorities on the arrest warrant issued by the U.S. District Court in Connecticut following KNOTH’s Indictment. KNOTH was extradited to the United States on April 2, and remained in custody until he was released on bond on July 24, 2009.

Judge Droney sentenced KNOTH below the advisory federal sentencing guidelines range of 18 to 24 months of imprisonment based on the defendant’s mental health, family considerations, charitable work, and the difficult conditions of KNOTH’s incarceration following his arrest in Germany. KNOTH also has paid full restitution to the victims of his crimes.

This matter was investigated by the Federal Bureau of Investigation and the South Windsor Police Department. The case was prosecuted by Assistant United States Attorney Calvin B. Kurimai.