Cincinnati woman charged with crimes related to making false racial discrimination claims against landlord
DAYTON – A U.S. District Court jury here today convicted Paul David Musgrave, 57, of Warhaw, North Carolina of conspiring to defraud the Mutual Federal Savings Bank of Troy, Ohio, and the Small Business Administration out of $1,715,600 in connection with a business loan he sought to establish a tire recycling plant in Troy.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigations (FBI) and Scott Dennis, Special Agent in Charge, U.S. Small Business Administration Office of Inspector General announced the verdict returned on February 7 following a trial that began January 28 before U.S. District Judge Timothy S. Black.
Testimony presented during the seven-day trial showed that in November 2008, Musgrave and others organized Dayton International Tire Recycling as a small business intending to construct and operate a tire recycling plant at 1400 Lytle Road in Troy. Musgrave owned 81 percent interest in the company. The rest was held by a Singapore-based corporation known as Intercontinental Trading of the British Virgin Islands.
In 2010, Musgrave applied for an SBA-backed loan for $1,715,650. In the loan application documents, he falsely certified that he would put money from his personal savings, home equity and from a home equity line of credit toward the project. The lender required proof that the tire shredding/recycling equipment and machinery they claimed to have purchased from an Australian company had actually been shipped before releasing the loan proceeds. The jury found that Musgrave provided the lender with fabricated financial documents, packing lists, commercial invoices and bills of lading.
After deliberating three days, the jury convicted Musgrave of one count of conspiracy, two counts of wire fraud, and one count of bank fraud.
Musgrave faces up to 30 years imprisonment, a $1 million fine, and five years of supervised release on each count. Judge Black will sentence Musgrave on June 13, 2013.
Stewart commended the cooperative investigation conducted by FBI and SBA-OIG agents, as well as Assistant U.S. Attorneys Dwight Keller and Alex Sistla, who are representing the United States in the case.