FOR IMMEDIATE RELEASE June 11, 2012
FORMER CONTRACTORS’ ASSOCIATION EXECUTIVE GETS TWO-YEAR FEDERAL SENTENCE FOR BANK FRAUD
Court Finds Defendant Created False Documents To Conceal Fraudulent $120,000 Loan
CHARLESTON, W.Va. – United States Attorney Booth Goodwin announced today that a former trade association executive was sentenced to two years in prison for making a false statement to a financial institution. Jonathan S. Deutsch, 58, of Charleston, previously pleaded guilty to the federal charge in May 2011. Deutsch worked as the executive secretary for the Constructors’ Labor Council of West Virginia, Inc. (“CLC”), and the administrator of its related trust fund, the West Virginia Heavy and Highway Construction Industry Fund (“WVHH”) from approximately 1995 through mid-2007.
In September 2004, Deutsch obtained a $120,000 line of credit from SunTrust Bank, which was secured by the WVHH’s assets. Deutsch admitted that he did not receive WVHH board member approval for the line of credit as required by the organization’s bylaws. Deutsch also admitted to purposefully failing to disclose to the bank that he lacked proper authority because he knew the bank would not otherwise approve the loan. SunTrust ultimately was forced to write off the loan as a loss because of Deutsch’s false statement.
Beginning in mid-2007, Deutsch created a series of backdated false meeting minutes in an elaborate scheme to conceal his fraudulent conduct. Deutsch presented the false meeting minutes, some dated more than ten years earlier, to former CLC board members asking them to sign the fraudulent documents. Several CLC board members, who had not been associated with the organization for years, unwittingly signed the meeting minutes without reviewing them or realizing that Deutsch was attempting to use their ratification to conceal, among other things, the fraudulent line of credit. At sentencing, the United States proved that the meeting minutes were indeed false and created by Deutsch in an attempt to obstruct justice. Deutsch received an enhancement to his sentence as a result of his obstructive conduct.
The matter was investigated by the United States Department of Labor’s Office of Inspector General. The prosecution was handled by Assistant United States Attorneys Thomas C. Ryan and Hunter P. Smith, Jr. United States District Judge Thomas E. Johnston presided over today’s sentencing.
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