NEW YORK CITY - Norman D’Souza, the former chief financial officer and vice president of finance of a New Jersey-based furniture wholesaler and retailer and of sister-firm Echelon furniture manufacturing in Indiana, pled guilty to defrauding lenders to obtain $17 million in loans from a commercial bank based in New York City and $1 million in municipal loans from Gas City, Indiana.
Preet Bharara, the U.S. Attorney for the Southern District of New York, and Diego Rodriguez, the Assistant Director the Federal Bureau of Investigation's New York office, said D’Souza made false statements and provided fraudulent documents concerning the companies' financial conditions. D’Souza, 50, faces a sentence of 30 years in prison.
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In 2011, a hopeful Governor Mitch Daniels joined executives to celebrate the furniture maker's plans to establish its U.S. manufacturing headquarters in Gas City, adding as 100 jobs by the end of that year, and up to 350 new jobs by 2013. It never panned out.
Munire was to launch Echelon and invest $5 million to purchase and equip a 200,000 square-foot recycled factory for production. By 2015, the factory CNC equipment was being auctioned.
Echelon Furniture operations
The Indiana Economic Development Corporation offered Echelon Furniture Inc. up to $1.35 million in performance-based tax credits and up to $20,000 in training grants based on the company's job creation plans. Gas City offered to provide up to $2.5 million in economic revenue bonds.
Echelon Furniture operations
According to Bharara, from 2011 until September 2014, D’Souza and others fraudulently induced a bank into lending millions of dollars by repeatedly making false and misleading statements about the firm's financial condition.D’Souza inflated sales and accounts receivable on “borrowing base certificates” and in financial statements that D’Souza provided to the bank to get loans. D’Souza used the falsely inflated sales and accounts receivable to mislead the bank, allowing him to secure and draw down a $17 million revolving credit facility. The company ultimately defaulted on the loans in September 2014.
D’Souza used the same method to mislead Gas City and drew down more than $1 million in loans it provided.
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