9 years, $7.6M fine for SpannPublished 12:48am Tuesday, September 18, 2012
Andalusia businessman Wiley Spann was sentenced to nine years in prison and ordered to pay $7.6 million in restitution for his part in a massive Pennsylvania loan fraud scheme that resulted in losses of $53 million to Equipment Finance LLC, (EFI).
EFI was a logging industry lender that provided funding for the purchase of forestry and land-clearing equipment.
Spann was one of eight defendants, who also included other local businessmen Harold Young and John S. Tomberlin.
From 2001 through 2007, the defendants orchestrated a pervasive scheme to steal money by looting the accounts of EFI and falsifying EFI’s books.
Spannn participated in the fraud scheme in a number of ways, including assisting the employees of EFI to create numerous bogus loans, forging EFI loan documents and auditor confirmation letters, and paying nominal borrowers to sign false EFI loan documents. For helping to manage the EFI loan fraud, Spann illegally compensated himself with between $80,000 and $100,000 per year in EFI funds. Tomberlin signed a bogus EFI loan contract in exchange for a payment from Spann of $10,000.
Young and Tomberlin also assisted Spann in looting EFI’s insurance escrow account. Although no EFI borrower had purchased insurance from their company, South Central Agency, Young and Tomberlin permitted Spann to create bogus SCA insurance invoices and send them to EFI. EFI then mailed checks to SCA, which were deposited into SCA’s accounts. In total, more than $1 million was sent from EFI to SCA for these nonexistent policies. For allowing Spann to use their invoices and accounts, Young and Tomberlin charged Spann 20 percent of the EFI money that flowed through their accounts. Young disbursed the rest of the stolen money at Spann’s direction.
Reports from the online media outlet Lancaster Online stated Spann was remanded into police custody following the sentencing.
Both Young and Tomberlin have entered guilty pleas. Sentencing is set for each on Jan. 21 and March 26, respectively.