James Marler Pleads Not Guilty to Specialty Filaments Bank Fraud
Burlington, VT – The Office of the United States Attorney for the District of
Vermont announced that Donald James Marler III, 44, who formerly resided in Shelburne but now lives in Emmaus, Pennsylvania, pleaded not guilty today in United States District Court in Burlington to charges of conspiracy and bank fraud. U.S. District Judge William K. Sessions III released Marler on conditions pending trial, which has not been scheduled.
On February 22, 2012, a federal grand jury in Rutland returned a two count indictment against Marler, the former president and chief executive officer for Speciality Filaments, Inc., a now-defunct company which at one time manufactured nylon and polyester filaments used as components in industrial and commercial brushes. The indictment charged Marler with conspiracy to commit bank fraud and bank fraud. According to the indictment, Specialty Filaments, which at one time had plants in Burlington and East Middlebury, had a multi-million dollar line of credit with Wells Fargo & Company that was secured by SFI's inventory and accounts receivables. Under the terms of the loan agreement, SFI could borrow up to a certain percentage of the value of its qualifying inventory and accounts receivables. SFI officials had to prepare and submit to Wells Fargo periodic reports certifying the value of the collateral securing SFI's loan. The indictment charges that, beginning in approximately June 2006 and continuing through December 2006, Marler conspired with Paul Mammorella, SFI's director of finance, and Jeffrey Audette, vice-president of manufacturing, to send Wells Fargo financial reports which falsely inflated the value of the company's accounts receivables and inventory. This enabled SFI to draw significantly more money from the line-of-credit than it actually was entitled to receive. In early January 2007, SFI went out of business and Wells Fargo discovered that the real value of SFI's collateral was substantially less than the outstanding loan balance. As a result, Wells Fargo and the Vermont Economic Development Authority, which guaranteed a portion of the loan, lost more than $1 million.
The United States Attorney emphasizes that the charges in the indictment are merely accusations and that Marler is presumed innocent unless and until he is proven guilty.
Marler faces up to 30 years of imprisonment and a fine of up to $1 million. The actual sentence in the event of conviction would be determined with reference to federal sentencing guidelines.
Mammorella and Audette have previously pleaded guilty and are awaiting sentencing.
The case has been investigated by the Burlington office of the Federal Bureau of Investigation.
Marler is represented by Robert Hemley. The prosecutor is Assistant U.S. Attorney Gregory Waples.