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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Virginia

FOR IMMEDIATE RELEASE
Wednesday, August 5, 2015

Danville Man Indicted on Fraud Charges

Douglas T. Alderson II Charged with Bank Fraud, Making False Statements

Danville, VIRGINIA – A majority owner of Hayes & Iron Metal, a full service metal recycling and salvage operation founded in 1980, was indicted by a federal grand jury sitting in the United States District Court for the Western District of Virginia in Roanoke on a variety of fraud charges.

Douglas T. Alderson II, 44, of Danville, Virginia, was charged in a sealed indictment earlier this month. That indictment was unsealed today after the defendant made his initial court appearance in U.S. District Court in Roanoke.

The grand jury has charged Alderson with one count of bank fraud and two counts of making false statements to obtain bank funds.

According to the indictment, Alderson secured a $6 million loan, later increased to $7 million, from BB&T bank for what he claimed were “seasonal working needs” for Hayes & Iron Metal. The primary collateral was Hayes’ accounts receivables. One of the entities Alderson listed on his Loan Base Report to BB&T was a vendor, Virginia Wire and Processing. However, it was later revealed that Virginia Wire and Processing was not a vendor of Hayes Iron & Metal but was rather an entity owned and funded by Alderson.  Alderson purposefully misstated the amounts owed to Hayes Iron and Metal in order to secure the loan.

The indictment alleges that Alderson treated Virginia Wire and Processing as a wholly owned subsidiary of Hayes and was paying Virginia Wire and Processing’s bills, payroll and advancing money to run their operations. It is also alleged that Alderson used Virginia Wire and processing money for personal expenses, including but not limited to: in 2011, $329,390 in American Express charges that were personal in nature, including $92,534 for lodging at the Ritz-Carlton in New York City and $53,856 for charter jets. In 2013, Alderson alleged charged $260,093 in personal charges on the American Express account, including but not limited to, $34,585 for lodging at the Ritz-Carlton, $79,415 for personal shopping, $68,712 for event tickets and $22,210 for jet, bus and limousine charters.

If convicted, the defendant faces up to 30 years in prison and/or a fine of up to $1 million.

The investigation of the case was conducted by the United States Secret Service and the Internal Revenue Service.  Assistant United States Attorney C. Patrick Hogeboom III will prosecute the case for the United States.

A Grand Jury Indictment is only a charge and not evidence of guilt.  The defendant is entitled to a fair trial with the burden on the government to prove guilt beyond a reasonable doubt.

Topic(s): 
Financial Fraud
Updated August 5, 2015