BOSTON - A Longmeadow man was sentenced today in federal court for defrauding TD Bank in connection with a multi-million dollar business loan.
Israel Schepps, 54, was sentenced by U.S. District Judge Michael A. Ponsor to six months in prison, to be followed by three years of supervised release during which time he will be required to serve six months of home confinement and perform 200 hours of community service. He was also ordered to pay $8.7 million in restitution to TD Bank.
Beginning in 2006 and continuing until the fraud was uncovered in early 2009, Vincent and two co-defendants fraudulently obtained loans to support their failing company, Mastex Inc., of Holyoke, Mass. In December 2005, Mastex obtained a $9 million line of credit from TD Bank secured by the company’s inventory and accounts receivable. The fraud included overstating inventory by more than $2 million and accounts receivable by more than $6 million. The fraud grew during its three-year duration as the company’s business declined. By the time the business closed its doors in February 2009, the loan balance was $11 million, most of which was backed by bogus assets. 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 email confirming an order that had not been made.
On June 5, 2012, co-defendant Laurence Vincent was sentenced to one year in prison
Co-defendant Jeffrey Stream is scheduled to be sentenced on June 26, 2012.
United States Attorney Carmen M. Ortiz; Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation-Boston Field Office; William P. Offord, Special Agent in Charge of the Internal Revenue Service’s Criminal Investigation in Boston; and Steven Ricciardi, Special Agent in Charge of the U.S. Secret Service made the announcement today. It was prosecuted by Assistant U.S. Attorney Karen L. Goodwin of Ortiz’s Springfield branch office.
Giving Back to the Community through a variety of venues & initiatives.
Financial Fraud Enforcement Task Force
Making sure that victims of federal crimes are treated with compassion, fairness and respect.
Stay Connected: Visit us on Twitter