OC Man Charged in $2.2M Bank Loan Fraud Scheme - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

OC Man Charged in $2.2M Bank Loan Fraud Scheme

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WILMINGTON, Del.- A federal grand jury in Delaware has indicted an Ocean City, Md. man on bank fraud and money laundering charges. 

Federal prosecutors for the District of Delaware said 60-year-old William Cook faces up to 30 years in prison on the bank fraud charge, and up to 10 years on the money laundering charge, in addition to possible fines and restitution. 

The indictment, which was handed down Tuesday, alleges that Cook operated a business in Sussex County, Del., called AJJ Distributing LLC (“AJJ”). Prosecutors said AJJ obtained a loan from a bank in Delaware in March 2008, which permitted AJJ to borrow funds from the bank, through periodic requests for disbursements, in an amount not to exceed 75 percent of the value of AJJ’s accounts receivables. Cook verified the amount of AJJ’s accounts receivable through weekly Borrowing Base Certificates (“BBCs”), which he signed and faxed to the Delaware bank, prosecutors said. 

According to the indictment, from on or around Jan. 16, 2009 through April 16, 2010, Cook falsified AJJ’s accounts receivables on BBCs submitted to the bank, by failing to properly account for amounts owed to AJJ from third parties. The indictment alleges that over time, Cook requested and obtained at least $2.2 million from the bank in loan proceeds after AJJ’s loan was already overdrawn according to its terms.  The Indictment also states that, in April 2010, Cook falsely over-represented AJJ’s outstanding accounts receivable by approximately $3 million.

Click here to read the indictment.

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