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Justice News

Department of Justice
U.S. Attorney’s Office
District of Vermont

Wednesday, February 3, 2016

CFO of Berlin, New Hampshire Business Pleads Guilty in Multi-million Dollar Bank Fraud Case

The Office of the United States Attorney for the District of Vermont stated that Steven D. Griffin, 59, of Berlin, New Hampshire, pleaded guilty before Chief Judge Christina Reiss yesterday to a charge of making a false statement to a financial institution. The charge alleged that in or about March 2011, Griffin submitted or caused to be submitted inflated figures for assets of Isaacson Structural Steel, Inc. (“ISSI”), including inventory, to Passumpsic Savings Bank, and other banks that provided ISSI loans totaling over $12 million, including a $2 million loan guaranteed by the Small Business Administration. Based on the plea agreement, Griffin faces up to three years in prison. Griffin agreed to a restitution order for $500,000.

Griffin was part owner,Vice President and CFO of ISSI, which before its bankruptcy was one of the largest businesses in the North Country. ISSI fabricated steel used in commercial construction. It entered into construction contracts to provide not only the steel for commercial buildings, but also to provide subcontractor services, principally the erection of the steel. ISSI purchased steel and fabricated the various pieces of steel needed for each contract at its Berlin, New Hampshire location and then shipped the steel to building sites. Early last year, ISSI’s CEO Arnold Hanson pleaded guilty to conspiring to submit false financial statements. Sentencings for Hanson and Griffin are scheduled for May 2016.

Griffin’s indictment and Hanson’s conspiracy charge allege that between August 2007 and April 2011, ISSI officers regularly submitted false and inflated figures to the banks regarding the value of ISSI’s assets. ISSI submitted these false statements about assets in borrowing base certificates and financial statements. ISSI regularly inflated its assets by one million dollars or more. For example, in August 2007, ISSI officers discussed, and then submitted to the bank, inflated figures for the amount of money owed to ISSI for work done in connection with 303 Third St., a construction project in Boston. In early 2011, officers participated in the submission of an ISSI’s draft financial statement for the financial year 2010, which contained significant overstatements about ISSI’s inventory. That financial statement had an inventory representation of approximately $12 million dollars. In fact, the value of ISSI’s inventory at that time was less than $2 million. Inventory was thus inflated by over $10 million.

In April 2011, the banks learned about issues with ISSI’s inventory figures. By June 2011, ISSI was in bankruptcy, and its assets were later liquidated. The lending banks lost millions of dollars as a result of the fraud. As part of the plea agreement, Griffin admitted that he knowingly submitted false information to the lending banks in 2010 and 2011. At the sentencing hearing, the government anticipates offering evidence showing that Griffin’s criminal activity began as early as 2007.

The United States is represented in this matter by Assistant U.S. Attorneys Paul Van de Graaf and Timothy Doherty. Griffin is represented by Paul Volk, Esq. and Douglas Miller, Esq. The investigation, which is ongoing, is being conducted by the Federal Bureau of Investigation, the Office of Inspector General for the Federal Deposit Insurance Corp., and the Office of Inspector for the Small Business Administration.

Updated February 3, 2016