The three former heads of USA Dry Van Logistics (USADV) have been arrested by the FBI on charges of wire fraud and conspiracy to commit wire fraud. All three were allegedly part of a revolving line of credit scam that cost GE Capital more than $26 million.
None of the three are currently employed by USADV, but they were the CEO, COO, and controller when the scam took place. The scam worked by falsely inflating their company’s financial performance data in order to appear more profitable to GE, who would then up their amount of available credit, which they would use to transfer the amounts they claimed to be making in to their accounts, allowing them to falsely inflate their performance again, and repeat the process over and over.
When GE Capital worked out what was actually going on, USADV filed for bankruptcy and once the debt was wiped clean, reopened under new ownership.
Both crimes the defendants are being charged with are punishable by up to 20 years in prison and a fine of up to $250,000. This means that each defendant could find themselves spending up to 40 years in jail and having to pay $500,000.
For more information, you can read the FBI press release here.
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