Transport Company Executive Indicted on Federal Fraud Charges
TAMPA, FL—United States Attorney A. Lee Bentley, III announces the return by a grand jury of an indictment charging Karl Stehlin (59, Tampa) with conspiracy to commit wire fraud and wire fraud. If convicted, he faces a maximum penalty of twenty years in federal prison on each count. The indictment also notifies Stehlin that the United States intends to forfeit $2,000,000, which is alleged to be traceable proceeds of the charged criminal conduct.
According to the indictment, from August 2008 through September 2009, Stehlin conspired to defraud a Minnesota factoring firm. “Factoring” is a financial transaction in which a business sells its accounts receivable (invoices) to a third party (the factor) at a discount. The factor advances a percentage of the face amount of the invoice to the business and collects the full amount from the customer in due course. The factor then pays the balance to the business, minus the factor’s commission and other fees.
In this case, the indictment alleges that the conspirators caused two trucking companies, JK Transport Express Inc. and JK Express Transport Inc., and a warehouse company, JK Transport Distribution and Warehouse, LLC, to enter into factoring agreements with Transportation Funding Group, Inc., (TFG).
The conspirators fraudulently represented to TFG that the trucking companies and warehouse company were doing business with several clients, when in fact the clients were fictitious. The conspirators allegedly created false and fraudulent invoices and bills of lading supposedly for services performed by the trucking and warehouse companies for the fictitious clients. In addition, they opened UPS store postal boxes and virtual offices and took other steps to make their activities appear real. The indictment further alleges that the conspirators used proceeds they received from later fraudulent invoices to repay earlier ones, thereby creating the illusion that the trucking and warehouse companies were providing services to the fictitious companies. As a result of the fraud, the factoring firm (TFG) suffered substantial losses.
An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.
This case was investigated by Federal Bureau of Investigation. It will be prosecuted by Assistant United States Attorney Robert A. Mosakowski.