FORMER TACOMA EXECUTIVE PLEADS GUILTY TO BANK FRAUD
PAUL B. LUKE, 49, of Omaha, Nebraska pleaded guilty today in U.S. District Court in Seattle to one count of Bank Fraud. LUKE was Director of Finance, and later Marketing Director, at T&W, a Tacoma corporation in the business of leasing commercial equipment to businesses.
According to the charging information, in November 1999 LUKE created a sham lease agreement in order to draw more than a million dollars from a line of credit T&W had with Bank of America. The agreement called for an affiliated company, Signature Automotive Group, to sell it's assets to T&W for $10 and then lease those assets back from T&W for more than $223,000 per month. This sham lease had no economic value but was used to allow T&W to draw funds from its line of credit. The money was then used to pay T&W's employees. The company later defaulted on the $1.2 million loan.
Bank Fraud is punishable by up to 30 years in prison, up to one million dollar fine and three to five years of supervised release. Sentencing for LUKE is scheduled for June 10, 2005 at 9:00 AM in front of U.S. District Judge Franklin D. Burgess.
The case was investigated by the Federal Bureau of Investigation. Assistant United States Attorney Arlen Storm prosecuted the case.
For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney's Office, Western District of Washington at (206) 553-4110.
