Feds: Phony business transactions cost lenders $100M - Dallas News | myFOXdfw.com

Feds: Phony business transactions cost lenders $100M

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CHICAGO (Sun-Times Media Wire) -

A north suburban man and his Pennsylvania partner borrowed about $190 million to fund non-existent equipment purchases between their businesses, but actually used the money to pay off loans and mortgages, according to federal prosecutors.

Mark Anstett, 58, of Lake Forest, sold refurbished semiconductor-making machinery at Palatine-based Equipment Acquisition Resources, where he was co-owner and president, according to a statement from the U.S. Attorney's office.

Co-defendant George Ferguson, 60, of Carlisle, Pa., was owner and president of the now former Machine Tools Direct in Carlisle, prosecutors said. Former Chicagoan Sheldon Player, who hid his involvement in Anstett's company, was a co-conspirator until his death in Wyoming in November 2013, prosecutors said.

Anstett and Ferguson are each charged with five counts of wire fraud, four counts of bank fraud and one count of mail fraud in a 10-count indictment returned by a federal grand jury Thursday. The indictment seeks forfeiture of about $190 million, the statement said.

Between 2006 and October 2009, the three men and others used EAR and MTD to fraudulently obtain about $190 million in financing from various lenders by lying about business operations, financial status, and the need for financing, the indictment alleges. That resulted in losses to lenders of at least $100 million.

The scheme worked by getting money for EAR to purchase equipment from MTD, then arrange sham sales transactions between the companies, the indictment alleges. None of the sales actually took place, prosecutors allege.

Anstett, Ferguson, and Player told lenders that EAR and MTD were separate companies engaged in sales transactions, but after MTD received financing payments, it sent most of the proceeds to EAR to make payments on other loans, prosecutors allege.

In addition to the indictment, a civil lawsuit was filed Friday to forfeit a bed and breakfast in Hoback Junction, Wyo., where Player lived.

According to the civil complaint, MTD transferred money it received from lenders to various EAR bank accounts, and then to other accounts, including accounts owned by Player and his wife. Player used the money to pay about $1.8 million on mortgages on the bed and breakfast, the suit claims.

Each count of mail, wire,and bank fraud carries a maximum penalty of 30 years in prison and a $1 million fine.

Anstett and Ferguson will appear for arraignment at a later date in U.S. District Court in Chicago.

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