Springfield Area Business Owner Sentenced for $5.5 Million Fraud Scheme
SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that the owner of several Springfield, Mo., area restaurants was sentenced in federal court today for a more than $5.5 million bank fraud scheme.
Bruce Swisshelm, 70, of Battlefield, Mo., was sentenced by U.S. District Judge Brian C. Wimes to five years in federal prison without parole. The court also ordered Swisshelm to pay $5,592,583 in restitution.
Swisshelm was the owner of Horned Frog Deli, Inc., and Swisshelm Properties, Inc. These corporations, which specialized in the restaurant industry, owned and developed commercial properties in Springfield and elsewhere. Swisshelm owned and operated Burger King restaurants, Macaroni Grill restaurants, San Francisco Oven restaurants, McAlister’s Deli restaurants, Ebbett’s Field restaurants and a Fog City Coffee restaurant.
On July 22, 2015, Swisshelm pleaded guilty to bank fraud and money laundering. Swisshelm was originally sentenced to one year and one day in prison on Jan. 22, 2016, but the government appealed that sentence. The Eighth Circuit U.S. Court of Appeals found Swisshelm violated the terms of his plea agreement and ordered the case to be re-sentenced.
Swisshelm admitted that he submitted false financial documents to Great Southern Bank in order to receive four commercial loans, totaling $5,592,583, from February to June 25, 2011. The bank relied on the false information provided within the financial statements submitted by Swisshelm when it approved the commercial loans.
According to court documents, Swisshelm knew his businesses had lost money for several years and were on the brink of bankruptcy. He gambled away what little money remained, and Arvest Bank, his original bank, denied numerous requests for extensions on his existing loans and his request for additional financing. Instead of simply declaring bankruptcy or selling off a portion of his assets to potentially preserve a part of his business, Swisshelm perpetrated a multi-million dollar fraud against Great Southern Bank.
Swisshelm intentionally traded on his reputation and deceived officials with Great Southern Bank into believing that his businesses were in good financial heath and he was able to repay these multi-million dollar loans. When asked for his tax documents, he again lied to Great Southern Bank officials and claimed the documents were not complete.
Swisshelm instead submitted financial statements to the bank that claimed his businesses earned a net income of more than $780,000 in 2010. Tax documents submitted by Swisshelm to the Internal Revenue Service revealed those businesses had losses that exceeded $1.8 million in 2010.
Almost immediately after receiving these monies from Great Southern Bank, Swisshelm failed to make even his minimum payment requirements toward the loan. Within approximately 60 days Swisshelm filed for bankruptcy and attempted to have the entire $5.5 million loan excused by the bankruptcy court.
Officials with Great Southern Bank began investigating the representations made by Swisshelm when he applied for these loans. During the bank’s initial investigation and a subsequent investigation by law enforcement, it was determined that nearly every representation made by Swisshelm as to the financial standing of his businesses and restaurants were lies. He claimed that his two primary corporations were either making significant profits or had reversed earlier losses and were breaking even. He also claimed ownership of several restaurants outside the state of Missouri and claimed additional revenue from those businesses as support for approval of his loan request. In truth, both of Swisshelm’s corporations and his associated restaurants were losing vast sums of money. At the time his multi-million dollar loan was approved, his out-of-state restaurants, which he had claimed to Great Southern Bank were making money, had actually been closed, shuttered, or seized by his creditors for outstanding debts owed.
This case was prosecuted by Assistant U.S. Attorney Patrick Carney. It was investigated by the FBI and IRS-Criminal Investigation.