Monday, an Alabama man pleaded guilty in federal district court in connection with a massive loan-fraud scheme that resulted in losses of $53 million to Equipment Finance LLC, (EFI). EFI, based in Lititz, was a logging industry lender based that provided funding for the purchase of forestry and land-clearing equipment.
John Wiley Spann, 50, of Andalusia, Alabama, pleaded guilty to conspiracy, conspiracy to commit mail fraud, mail fraud, and money laundering. Spann is one of eight defendants in this case.
Federal prosecutors alleged that Spann, who was a logging equipment dealer, participated in the loan-fraud scheme in numerous ways. He assisted five employees of EFI, all of whom are co-defendants, to create bogus loans, forge loan documents, and pay “fake” borrowers to sign phony loan documents.
Prosecutors said Spann scammed approximately $80,000 to $100,000 in annual “bonuses” from 2001 through 2007. Allegedly this was done by Spann in order to manage the fraud and use additional EFI funds to pay off personal debts.
Spann’s guilty plea leaves him facing a maximum penalty of 45 years in prison and a $2.5 million fine. He has also agreed to forfeit $7.6 million he had gained from the fraud.
Initially pleading not guilty in November 2010, Spann acknowledged before U.S. District Judge Paul S. Diamond that he was deeply involved in the scam. Spann became the fourth EFI defendant to enter a guilty plea. He joins Joseph M. Braas, Michael J. Schlager and Mary C. Stankiewicz, all of Lancaster County and former EFI officials.
A fifth defendant in the case, John S. Tomberlin, also an Alabama businessman, is set to enter a guilty plea next month.
That places all five defendants to testify at the October trial of the remaining defendants, former EFI employees Misty L. Kroesen and her husband Curtis A. Kroesen, and Alabama businessman Harold W. Young.
EFI owner Sterling Financial discovered the fraud in 2007, triggering Sterling’s sale to PNC and the layoff of 300 Sterling workers, including many at its Bank of Lancaster County unit.
Spann is free on $50,000 bail and is set for a December 15th sentencing hearing.
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