Manager convicted of 13 felonies in wood shaving theft and sales scheme

HOQUIAM, Wa. – A manager of a wood shavings business was convicted this week in U.S. District Court in Tacoma of 13 federal felonies following a six-day jury trial.

Willis D. Lonn, Jr., 68, of Aberdeen, Washington, was convicted of nine counts of mail fraud, two counts of income tax evasion, one count of money laundering conspiracy and one count of interstate transportation of stolen property. The jury deliberated two hours before returning the guilty verdicts.  U.S. District Judge Benjamin H. Settle scheduled sentencing for January 9, 2017. 

U.S. Attorney Annette L. Hayes said records filed in the case and testimony at trial, showed Lonn was a long time manager for Long Beach Shavings Company.  The company, owned by his uncle and cousins, was based in Long Beach, California, and also operated one plant in Hoquiam, Washington, where it processed wood shavings for use on farms, at horse shows or in pet stores.  
Lonn had managed the Hoquiam plant for his uncle for about a decade when he launched a scheme in the 2000s to steal and sell the wood shavings products and keep the money, selling the shavings directly to customers in Washington and Oregon without turning the proceeds over to the company.  
Eventually, according to Hayes, Lonn arranged to get wood chips for free from a Montesano lumber mill, but he got his  parent company to pay his sham business, M & R Lumber, for the raw wood materials.  Lonn posed as M & R Lumber and created phony invoices to bill Long Beach Shavings for the wood chips.
Between the two schemes, Lonn netted more than $1.3 million from Long Beach Shavings.  When the owner found out in 2011 about the fraud, he was terminated and the full scope of the scheme came to light. In addition to the theft, he also dodged $80,000 in income taxes in 2009 and 2010. 

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Robert Dalheim

Robert Dalheim is an editor at the Woodworking Network. Along with publishing online news articles, he writes feature stories for the FDMC print publication. He can be reached at [email protected].