FORMER LONGVIEW CONTRACTOR PLEADS GUILTY TO MAIL FRAUD, BANK FRAUD AND MONEY LAUNDERING
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 pleaded guilty today in U.S. District Court in Tacoma to Mail Fraud, Bank Fraud and Money Laundering. CHILL was charged today by information, and entered guilty pleas, 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. Sentencing is set for February 1, 2010, in front of U.S. District Judge Benjamin H. Settle.
According to the charging information and plea agreement, 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 of 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 entered today, 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.
Mail Fraud is punishable by up to 20 years in prison and a $250,000 fine. Bank Fraud is punishable by up to 30 years in prison and a $1 million fine. Money Laundering is punishable by up to ten years in prison and a $250,000 fine or up to twice the value of the criminally derived property.
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 is being prosecuted by Assistant United States Attorney Kurt Hermanns.
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.
