An indictment was handed down by a federal grand jury Tuesday charging Sussex County business owner William Cook, 60, of Ocean City, MD, with bank fraud and money laundering.
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 alleges that the defendant operated a business in Sussex County, known as AJJ Distributing LLC.
AJJ obtained a loan from a bank in Delaware, in March 2008. According to the terms of the loan, AJJ was permitted to borrow funds from the bank in an amount not to exceed 75 percent of the value of AJJ’s accounts receivables. The defendant verified the amount of AJJ’s accounts receivable through weekly Borrowing Base Certificates (“BBCs”), which he signed and faxed to the Delaware bank.
The identity of the bank was not identified in the indictment, nor was any mention made of the status of the loan or whether the bank lost money.
According to the Indictment, from on or around January 16, 2009 through April 16, 2010, the defendant falsified AJJ’s accounts receivables submitted to the bank, by failing to properly account for amounts owed to AJJ from third parties.
Over time, the defendant 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 alleges that, in April, 2010, the defendant falsely over-represented AJJ’s outstanding accounts receivable by approximately $3 million.
U.S. Attorney Charles Oberly gave the following comment, “I want to thank both the IRS and the Postal Service Investigators, who diligently pursue such frauds as alleged in this Indictment, and who pursue cases like this despite a shortage of personnel.”
This case is the result of an investigation conducted by the Internal Revenue Service, Criminal Investigation and the United States Postal Inspection Service. The prosecution is being handled by Assistant United States Attorney Lauren Paxton.
Click on the link below for a copy of the indictment:
