Two former executives at Transmar Commodity Group Ltd pleaded guilty on Friday to defrauding banks to win a $400 million credit line for the now bankrupt New Jersey-based cocoa trading company, Reuters reported. Peter G. Johnson, who was Transmar’s chief executive, and his son Peter B. Johnson, who oversaw Transmar’s Euromar Commodities affiliate, both pleaded guilty to conspiracy to commit bank fraud and wire fraud before U.S. District Judge Jed Rakoff in Manhattan, according to the office of U.S. Attorney Geoffrey Berman. Transmar, a Morristown, New Jersey-based unit of Transmar Group Ltd, sold cocoa products to chocolate makers including Hershey Co. and Nestle SA prior to filing for chapter 11 protection on Dec. 31, 2016. Prosecutors have accused the three executives of “lying repeatedly” from 2014 to December 2016 by giving banks false “borrowing base” reports that inflated the amount of collateral Transmar had to support its borrowings. Transmar owed the banks roughly $360 million at the time of the bankruptcy, prosecutors said. Read more.
For a further analysis of commercial fraud, make sure to pick up a copy of ABI’s Fraud and Forensics: Piercing Through the Deception in a Commercial Fraud Case.
