FORMER LONGVIEW CONTRACTOR SENTENCED FOR MAIL FRAUD, BANK FRAUD AND MONEY LAUNDERING
Former Owner of Damage Restoration Company Submitted $3.2 Million in Inflated Claims to Insurance Companies and Defrauded SBA of additional $2 million
DONALD CHILL, 41, of Marco Island, Florida, a former resident of Longview and Battleground, Washington was sentenced today in U.S. District Court in Tacoma to four years in prison, five years of supervised release and $4.9 million in restitution for Mail Fraud, Bank Fraud and Money Laundering. CHILL pleaded guilty in October 2009, following the investigation of his company, Charles Prescott Restoration, a disaster restoration company specializing in rehabilitating real and personal property damaged by fire, flood, wind and vandalism. The company specialized in making repairs paid for by insurance companies. In his plea agreement, CHILL admits to submitting inflated billings for the work, and then selling the company without disclosing the fraud. At sentencing U.S. District Judge Benjamin H. Settle said, “Even though it is unlikely you will commit this sort of crime again, deterring others is an important part of our system. This was a very serious crime and a great deal of money was involved.”
According to records in the case, CHILL’s company worked primarily for Mutual of Enumclaw, based in Enumclaw. Washington. CHILL’s company would respond to a damaged site, make emergency repairs and then submit a proposal for comprehensive repairs. The company used a special computer program authorized by Mutual of Enumclaw that built in 20% profit and overhead for the contractor. Beginning as early as 2004, CHILL began inflating the estimates and invoices mailed to Mutual of Enumclaw. CHILL padded bills from sub-contractors, or submitted forged secondary estimates that appeared to be from competitors. In just ten jobs scrutinized over the last five years CHILL over billed by an estimated $3.2 million. In one instance detailed in charging papers, CHILL billed for $84,000 in purported electrical work when the identified electrical contractor had actually done none the billed work, at all. Indeed the electrical contractor’s bill had been entirely fabricated by Chill and submitted to the insurance company.
In May 2007, CHILL sold the business to another individual. As part of the sale CHILL certified that the company books and records were true and correct. Had the bank that financed the sale known of the false billing scheme, or the SBA which guaranteed the loan known of it, they would not have approved the $1.8 million loan to purchase the business. CHILL is charged with bank fraud for that part of the scheme, and he is charged with money laundering for taking those ill-gotten proceeds and using them to purchase an expensive home on Marco Island, Florida. The home is being forfeited to the United States under the terms of the plea agreement.
As part of the plea agreement, CHILL will pay Mutual of Enumclaw $3,227,911 in restitution and an additional $1,708,062 in restitution to Wachovia Bank and the Small Business Administration (SBA) who made the loans for the purchaser of CHILL’s company.
In asking for a 57 month prison term, Assistant United States Attorney Kurt Hermanns wrote to the court, “Greed is the motivation for many fraud cases. In this case Mr. Chill’s greed was extreme. He was not satisfied to merely steal some $3.2 million in insurance payments, he also decided to sell the business at a falsely pumped-up price for the purpose of another round of theft.”
The case was investigated by the Small Business Administration Office of Inspector General (SBA-OIG) and the Internal Revenue Service Criminal Investigations (IRS-CI). The case was prosecuted by Assistant United States Attorneys Kurt Hermanns, Thomas Woods and Jim Lord.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.