Three Longmeadow Men Convicted of Bank Fraud
| U.S. Attorney’s Office June 08, 2011 |
SPRINGFIELD, MA—Three Longmeadow men were convicted today in federal court of conspiracy to defraud TD Bank in connection with a multi-million line of credit issued to their Holyoke company.
JEFFREY STREAM, 53, LAWRENCE VINCENT, 61, and ISRAEL SCHEPPS, 52, all of Longmeadow, pleaded guilty to a one-count information charging them with defrauding TD Bank. At the plea hearing, the prosecutor told the court that the defendants owned Mastex, Industries, Inc., a Holyoke company, which manufactured airbags, among other things. In December 2005, Mastex obtained a $9 million line of credit from TD Bank secured by the company’s inventory and accounts receivable. Beginning in January 2006 and continuing until the fraud was uncovered in February 2009, the defendants fraudulently inflated the assets securing the line of credit in order to keep borrowing money from the bank. The fraud included overstating inventory by more than $2 million and accounts receivable by more that $6 million. The prosecutor told the court that the defendants perpetuated the fraud over a three-year period, during which time the overstatement of assets grew as the loan increased to more than $11 million. In order to hide the fraud from the bank, the defendants caused the generation of false documents, including false invoices for goods that had not been ordered and, on one occasion, a false e-mail confirming an order that had not been made. The fraud resulted in the shutdown of the business.
If convicted, each defendant faces up to 30 years’ imprisonment, to be followed by five years of supervised release and a $250,000 fine.
United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation -Boston Field Office; and William Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield branch office.