Man Charged In $2.2M Bank Loan Fraud Scheme
WILMINGTON, Del. - Charles M. Oberly, III, United States Attorney for the District of Delaware, announced that an Indictment was been handed down by a federal grand jury yesterday charging William Cook, age 60, of Ocean City, Maryland, with bank fraud and money laundering. The defendant faces up to 30 years in prison on the bank fraud charge, and up to 10 years on the money laundering charge, in addition to possible fines and restitution.
The Indictment alleges that the defendant operated a business in Sussex County, Delaware, called AJJ Distributing LLC (“AJJ”). AJJ obtained a loan from a bank in Delaware, in March 2008. According to the terms of the loan, AJJ was permitted to borrow funds from the bank, through periodic requests for disbursements, in an amount not to exceed 75% of the value of AJJ’s accounts receivables. The defendant verified the amount of AJJ’s accounts receivable through weekly Borrowing Base Certificates (“BBCs”), which he signed and faxed to the Delaware bank.
According to the Indictment, from on or around January 16, 2009 through April 16, 2010, the defendant falsified AJJ’s accounts receivables on BBCs submitted to the bank, by failing to properly account for amounts owed to AJJ from third parties. Over time, the defendant requested and obtained at least $2.2 million from the bank in loan proceeds after AJJ’s loan was already overdrawn according to its terms. The Indictment alleges that, in April, 2010, the defendant falsely over-represented AJJ’s outstanding accounts receivable by approximately $3 million.
U.S. Attorney Oberly gave the following comment, “I want to thank both the IRS and the Postal Service Investigators, who diligently pursue such frauds as alleged in this Indictment, and who pursue cases like this despite a shortage of personnel.”
This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation and the United States Postal Inspection Service. The prosecution is being handled by Assistant United States Attorney Lauren Paxton.
The charges in the Indictment are only allegations. The defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.