Former Meadowcraft CEO Sentenced for Fraud
| U.S. Attorney’s Office January 11, 2012 |
BIRMINGHAM—A federal judge today sentenced a former executive of Meadowcraft Inc. to two-and-a-half years in prison for fraud totaling more than $5 million, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Patrick Maley.
U.S. District Judge R. David Proctor sentenced LARRY GENE MAYNOR on a charge of wire fraud and ordered $100,000 in restitution and forfeiture. Maynor was chief financial officer of Meadowcraft, the now defunct wrought iron furniture manufacturer that was based in Pinson. The fraud was charged in connection to a scheme by Maynor to misrepresent the terms of a large sales contract in order for Meadowcraft to borrow $5.1 million from four lending institutions. Meadowcraft’s 2007 credit agreement with those institutions—Wells Fargo Bank, Webster Business Credit Corp., RZB Finance, and Burdale Finance Limited—specifically prohibited the manufacturer from borrowing against consignment or “sale-or-return” purchases.
Maynor, 48, of Birmingham, pleaded guilty to the charge in August. According to court documents, Maynor misrepresented the terms of Meadowcraft’s September 2008 sales contract with Outdoor Experience Inc. in order to use proceeds from the contract as collateral for the loans. In December 2008, Maynor submitted a false borrowing certificate to the lending institutions that characterized the $5.7 million agreement with Outdoor Experience as an insured account receivable. It was, however, a consignment agreement that required Meadowcraft to buy back all products that Outdoor Experience was unable to sell. The agreement signed by Maynor with the lending institutions specified that such contracts could not be loaned against.
“Corporate fraud damages companies and their employees, but it also hurts our community,” Vance said. “When a company is weakened by fraud among its officers, it jeopardizes the job security of its workers and can destroy the livelihood of them and their families,” Vance said. “These cases are serious matters we are committed to investigating and prosecuting.”
The FBI investigated the case. Assistant U.S. Attorney Patrick Carney prosecuted the case.