News and Press Releases

U.S. Attorney Charges Former Meadowcraft CEO with Fraud

FOR IMMEDIATE RELEASE
June 29, 2011

BIRMINGHAM – Federal prosecutors have charged a former executive of Meadowcraft Inc. with fraud totaling more than $5 million, announced U.S. Attorney Joyce White Vance and FBI Special Agent in Charge Patrick Maley.

A one-count information filed today in U.S. District Court charges LARRY GENE MAYNOR with wire fraud. Maynor was chief financial officer of Meadowcraft, the now defunct wrought iron furniture manufacturer that was based in Pinson. The fraud is 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, has signed a plea agreement with the government acknowledging his guilt. According to the 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 hurts companies and employees in our community. It jeopardizes job security and can destroy the livelihood of workers and their families,” Vance said. “These type cases are serious matters that we are committed to prosecute.”

The maximum sentence for the wire fraud count is 30 years in prison and a $1 million fine. The notice of forfeiture specifies a forfeiture amount of $100,000.

The FBI investigated the case. Assistant U.S. Attorney Patrick Carney is prosecuting the case.

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