Anderson, S.C., Woman Gets Prison for Extensive Bank Fraud Scam and Environmental Crime

From EPA:

FOR IMMEDIATE RELEASE
January 22, 2015

Anderson, S.C., Woman Gets Prison for Extensive Bank Fraud Scam and Environmental Crime

Nancy Stein operated American Screw and Rivet Corporation which was also sentenced

Contact: Davina Marraccini, 404-562-8293 (direct), 404-562-8400 (main), marraccini.davina@epa.gov

ATLANTA – United States Attorney Bill Nettles stated late yesterday that Nancy Marie Stein, age 62, of Anderson, South Carolina , was sentenced by Senior United States District Judge Henry M. Herlong in federal court in Greenville, to a total of 73 months in prison for six counts of violating Title 18, United States Code, Section 1344, commonly referred to as bank fraud; and 60 months for one count of violating Title 42, United States Code, Section 6928(d)(2)(A), for storing hazardous wastes without a permit. The sentences were ordered to run concurrently for a total sentence of 73 months. Stein was also ordered to pay restitution in the amount of $17,692,974. Stein’s Company, American Screw and Rivet Corporation (ASR) of Anderson, was placed on probation for 5 years and ordered also to pay restitution for its involvement in the bank fraud and storing hazardous wastes without a permit.

Both Stein and ASR entered pleas of guilty to the charges on December 16, 2013. The case had originally been set for sentencing on July 15, 2014, but was continued due to issues raised by Stein.

During the guilty plea hearing in December of 2013, the factual presentation revealed that had the cases had gone to trial, the Government would have presented evidence indicating that from at least 2004 and continuing until in 2011, while operating ASR, Stein developed a scheme to defraud a number of financial institutions. As part of the ruse, Stein created a number of fictitious manufacturing companies, organizations and business associations with apparent legitimate addresses, bank accounts and telephone numbers in various locations throughout the Southeast and the Midwest including Alabama, Georgia, Indiana, Ohio, and Pennsylvania. The addresses were mail drops, Stein controlled the accounts, and the telephone numbers were answering services. One of the fictitious entities was an accounting firm which issued audits and financial statements attesting to the fiscal soundness of ASR.

Stein would then apply to various financial institutions for loans for ASR. Often she would present to the institutions false invoices indicating that ASR had purchased types of specialized machinery from the fictitious vendors which could be used as collateral for loans. Often, Stein would have the financial institutions forward the loan proceeds to the non-existent vendors’ accounts. The deception also involved removing legitimate identity plates on existing machinery at the ASR location and replacing them with false plates reflecting the serial numbers of the fictitious machines.

After a number of years of running the scheme, Stein’s and ASR’s debts continued to grow, and ultimately, ASR’s creditors forced the company into involuntary bankruptcy in 2011. Thereafter, the United States Secret Service was asked to investigate. At least twenty six victim financial institutions were identified with cumulative losses in excess of $16 million. When the investigation focused on Stein, in a statement to the Secret Service, she admitted what she had done and took full responsibility for the fraud.

Resident Agent in Charge of the Greenville, S.C. Office of the United States Secret Service, Thomas M. Griffin, stated: “Today's sentencing was the result of a criminal investigation which was initiated in 2010. The Secret Service utilized significant resources conducting interviews, reviewing bank records and other documents associated with the fraudulent loans obtained by these defendants. These investigative efforts have ensured that the defendants would be successfully brought to justice for the crimes which they committed.”

With respect to the environmental crime violation, the Government was prepared to show that some years prior to the involuntary bankruptcy, Stein and ASR had been informed that they needed a permit from the South Carolina Department of Health and Environmental Control (DHEC) or from the United States Environmental Protection Agency (EPA) to store the large quantities of hazardous wastes generated by ASR’s manufacturing process. No permit to store hazardous waste was ever sought by Stein or ASR or issued by EPA or DHEC.

In June, 2011, as a result of a DHEC search of ASR’s property, a large quantity of hazardous waste was discovered on site. Thereafter, more than 24,000 gallons of waste were removed from the sight and disposed of by EPA at a cost of approximately $1,720,000.

“For a number of years, the defendants stockpiled thousands of gallons of unpermitted hazardous waste at ASR’s location in Anderson,” said Maureen O’Mara, Special Agent in Charge of EPA’s criminal enforcement program in South Carolina. “This waste consisted of uncontained flammable and highly corrosive materials which were exposed to the elements. Today’s sentencing shows that those who refuse to comply with the law, putting public health and the environment at risk, will face the consequences in court.”    

The cases were investigated by agents of the United States Secret Service and the EPA’s Criminal Investigation Division, and prosecuted by Assistant United States Attorney William C. Lucius of Greenville.