Executive Pleads Guilty to $10.5 Million Bank Fraud
RICHMOND, Va. – Michael P. Klekamp, 67, of Charlottesville, pleaded guilty today to charges of bank fraud that resulted in a $10.5 million loss to Fauquier Bank.
According to court documents, Klekamp was the President of Capitol Components and Millwork, Inc. (CCM), of Culpeper. CCM was involved in the manufacture, fabrication and distribution of architectural building material millwork items for mid to high-end residential and commercial buildings. To run its business, CCM drew money from a standard secured revolving line of credit line at Fauquier Bank. The credit line agreement required CCM to submit periodic reports to the Bank about the value of the underlying collateral, such as accounts receivable and inventory, and the creditworthiness of CCM.
According to court documents, Klekamp fraudulently maintained the credit line by misrepresenting the true financial condition of CCM and made a variety of false statements to the bank about the true amount and quality of the collateral of CCM. On Oct. 25, 2015, Klekamp submitted documents to the bank fraudulently stating there was approximately $17 million of total accounts receivable and inventory securing the bank’s $11.5 million credit line, while in actuality there was no more than $3.4 million of total accounts receivable and inventory. Contrary to the fake financial statements submitted to the bank, CCM was not able to repay the interest or principal amount of the loan, resulting in a loss of approximately $10.5 million as a result of the scheme.
Klekamp faces a maximum penalty of 30 years in prison when sentenced on March 24, 2017. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory Sentencing Guidelines and other statutory factors.
Dana J. Boente, U.S. Attorney for the Eastern District of Virginia; and Adam S. Lee, Special Agent in Charge of the FBI’s Richmond Field Office, made the announcement after the plea was accepted by U.S. District Judge Henry E. Hudson. The case was investigated by Richmond Division, Charlottesville Resident Agency of the FBI. Assistant U.S. Attorney David T. Maguire is prosecuting the case.
A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:16-CR-141.