Mark Anstett, of Lake Forest, IL, was the president and co-owner of Equipment Acquisition Resources (EAR), which allegedly made semiconductor wafers and refurbished machinery used to make semiconductors work. George Ferguson, of Carlisle, PA, was the owner and president of former Machine Tools Direct (MTD) of Carlisle, PA. These two men were recently charged by the U.S. Attorney’s Office for the Northern District of Illinois with allegedly engaging in a scheme to fraudulently obtain approximately $190 million from banks and financing companies. The two men used their businesses as the main source of the scheme.
Between 2006 and October 2009, it is alleged that Anstett, Ferguson, and Player, another member of the scheme that was not indicted, used EAR and MTD to fraudulently obtain approximately $190 million in financing from various lenders. These obtained these finances by using false representations about EAR’s business operations, financial status, independence from MTD, and need for financing. The lenders loss was approximately $100 million. These lenders include First National Bank of McHenry, Libertyville Bank & Trust, Millennium Bank, Waukegan Bank, First Chicago Bank and IBM Global Finance.
The scheme to defraud did not stop there. The defendants then allegedly obtained financing for EAR to purchase equipment from MTD and arranged sham sales transactions between the two companies. The defendants falsely represented to lenders that EAR and MTD were separate companies engaged in arms-length sales transactions. In reality, MTD was receiving financing payments from the lenders and sending them to EAR so that EAR could use the money to make payment s on other loans.
Anstett and Ferguson were each charged with ten counts: five counts of wire fraud, four counts of bank fraud, and one count of mail fraud. Player was not charged in the original indictment, but he was named as a co-schemer. Along with the ten charges, the indictment seeks forfeiture of approximately $190 million.
Bank fraud can be charged when a party knowingly defrauds or attempts to defraud a financial institution or obtains money, funds, credits, assets, securities or other property owned by or under the control of a financial institution. Mail and wire fraud are similar crimes. Mail fraud is intentionally planning, creating or carrying out a scheme to defraud others using the U.S. mail or private carriers during any part of the crime. Similarly, wire fraud is intentionally planning, creating or carrying out a scheme to defraud others using the Internet, phone, radio, or television. Each count of mail, wire, and bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine. Restitution is also a mandatory part of their potential sentence.
Source: Monitor Daily, Two executives indicted in $190MM financial equipment fraud, 3/3/14
18 U.S.C. § 1343