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Related: About this forumChief Financial Officer Of Furniture Company Sentenced For Accounting Fraud Against Bank, City
https://www.justice.gov/usao-sdny/pr/chief-financial-officer-furniture-company-sentenced-two-years-prison-accounting-fraudDepartment of Justice
U.S. Attorneys Office
Southern District of New York
FOR IMMEDIATE RELEASE
Friday, December 9, 2016
Chief Financial Officer Of Furniture Company Sentenced To Two Years In Prison For Accounting Fraud Against Bank, And Gas City, Indiana
Preet Bharara, the United States Attorney for the Southern District of New York, announced that NORMAN DSOUZA, the former chief financial officer and vice president of finance of a New Jersey-based furniture wholesaler and retailer (Company-1) and an Indiana-based furniture manufacturer affiliated with Company-1 (Company-2) (collectively, the Companies), was sentenced yesterday to two years in prison for orchestrating a fraudulent scheme to obtain $17 million in loans from a commercial bank based in New York, New York (the Bank), and $1 million in municipal loans from Gas City, Indiana (the City). DSOUZA and his co-conspirators obtained this financing by making false statements and providing false and fraudulent documents concerning the Companies financial condition. DSOUZA pled guilty on April 1, 2016, before U.S. District Judge Ronnie Abrams, who imposed yesterdays sentence.
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According to the allegations contained in the criminal information to which DSOUZA pled guilty, other documents filed in Manhattan federal court, and statements made in court proceedings:
From 2011 until September 2014, Company-1, through DSOUZA and others, fraudulently induced the Bank into lending Company-1 millions of dollars by repeatedly making false and misleading statements about Company-1s financial condition. DSOUZA falsely inflated Company-1s sales and accounts receivable on borrowing base certificates and in financial statements that DSOUZA provided to the Bank pursuant to loan agreements. DSOUZA used those falsely inflated sales and accounts receivable to mislead the Bank about Company-1s true financial performance, which enabled Company-1 to secure and draw down a $17 million revolving credit facility from the Bank. Company-1 ultimately defaulted on the loans issued by the Bank in September 2014. At that time, the outstanding balance of the loans was approximately $16.99 million.
Separately, in 2012, the City offered loans and other financial incentives to Company-2 in return for Company-2s agreement to operate a furniture factory in the City and employ local residents. To secure this arrangement, among other things, DSOUZA falsely inflated Company-2s sales figures in financial statements provided to the City. The false financial statements misled the City about Company-2s true financial performance and enabled Company-2 to secure and draw down more than $1 million in loans from the City. Company-2 ultimately defaulted on the loans issued by the City in September 2014, causing approximately 60 City residents to lose their jobs. At that time, the outstanding balance of the loans was $1 million.
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