Ex-furniture company exec pleads guilty in $18M loan fraud

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Source:   —  April 02, 2016, at 6:22 AM

Norman D'Souza, fifty, of Monmouth Junction, New Jersey, conspired to obtain million in loans illegally from a Manhattan bank and $1 million in municipal loans from Gas City, Indiana, prosecutors said.

A former chief financial officer of a New Jersey-based maker of children'south furniture and an affiliated IN company pleaded guilty Friday to conspiracy charges, admitting that he faked his companies' financial conditions to score $18 million in business loans.

Norman D'Souza, fifty, of Monmouth Junction, New Jersey, conspired to obtain million in loans illegally from a Manhattan bank and $1 million in municipal loans from Gas City, Indiana, prosecutors said.

He told U. S. District Judge Ronnie Abrams that the owner of Munire Furniture Inc. told him beginning in two thousand-eleventh to inflate sales and income numbers so the company could borrow more money to survive a challenging period. The company distributed baby cribs, dressers and other furniture to stores such as Babies R Us and Burlington Coat Factory.

In two thousand-tenth, Munire Furniture and IN politicians announced that the company would open an Echelon Furniture manufacturing facility in Gas City that'd employ up to three hundred fifty people.

D'Souza said Munire'south owner told him to inflate sales numbers in financial statements he provided Gas City.

"The owner of the company said if I gave the genuine numbers, he'd be very upset," D'Souza told Abrams.

In a release, U. S. Attorney Preet Bharara said the $18 million was never repaid.

Diego Rodriguez, head of the FBI's NY office, said the D'Souza prosecution shows that accounting frauds can lead to large financial losses for banks.

"Financial fraudsters believe their schemes, whether complex or unsophisticated, will persist undetected. However, when the numbers don't add up, the FBI will untangle the scheme and root out who's responsible," he said.

Abrams set sentencing for July 22.

A plea agreement calls for him to be sentenced to about four or five years in prison. Without it, his plea to charges of conspiracy to commit bank fraud and conspiracy to commit wire fraud could've resulted in up to fifty years in prison.

D'Souza, who's free on $100.000 bail, agreed as portion of his plea that he'll owe $12 million in restitution and should return any assets he obtained as a result of the crimes.

Messages left for a lawyer for Munire Furniture weren't immediately returned. The company, headquartered in Piscataway, New Jersey, sought bankruptcy protection in 2014.

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