Former Ohio Man Indicted For $1.2 Million Bank Fraud
A grand jury returned a four-count indictment charging a Mississippi man for a conspiracy in which he defrauded a Tennesse bank out of $1.2 million, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.
Paul D. Allen, age 52, of Oxford, Mississippi, age 52, was indicted on one count of conspiriacy to commit bank fraud and three counts of bank fraud.
Allen, a self-proclaimed entrepreneur and businessman, moved to the Northern District of Ohio in 1999. Prior to that, he lived in Tennessee, where he developed a relationship with Stephen Henry, an unindicted co-conspirator.
Allen and Henry executed a scheme to defraud Oakland Deposit Bank and obtain money and property from the bank by means of materially false and fraudulent representations. The bank was chartered and had offices in Tennessee. Henry served as president of the bank and also served as a loan officer, according to the indictment.
Allen contacted several people in Ohio and recruited them to invest in various business projects he promoted, including B-Telecom Incorporated, a purported data-storage company. Allen promised investors they would receive a percentage ownership in the business in return for the investors obtaining loans from the Oakland Deposit Bank in their own names. Allen told the investors the loan proceeds would be used for operating the business, according to the indictment.
Between 2003 and 2008, Allen had the investors complete loan documentation in support of the loans, and then submit the loan applications to Henry, or accompany the investors when they submitted the loan applications to Henry, according to the indictment.
Allen forged borrower signatures on loans for amounts ranging between $42,770 and $168,000. He sometimes took out additional loans in borrowers' names without their knowledge. He used the proceeds to pay personal expenses or to make interest payments on existing loans, according to the indictment.
If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense, and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.
The case is being prosecuted by Assistant U.S. Attorney M. Kendra Klump following an investigation by the Federal Bureau of Investigation (Cleveland Division, Painesville Resident Agency) and with the assistance of the Geauga County Prosecutor’s Office.
An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.