Fraud pleas from workers of bankrupt business - KWWL - Eastern Iowa Breaking News, Weather, Closings

Fraud pleas from workers of bankrupt business

CEDAR RAPIDS (KWWL) - The former owner and four employees of Walterman Implement, a failed implement dealership formerly located in Dike, plead guilty Thursday to federal fraud and wiretapping charges.

The charges come after a scheme that led to the dealership's bankruptcy in 2005.

Leon Walterman and his co-schemers maintained a false set of books, fabricated deposit slips and bank statements, moved equipment, switched serial numbers on and otherwise disguised and altered equipment to conceal the scheme from the lenders.

In order to keep track of the auditors' progress, intentions, and conclusions as they audited Walterman Implement, Walterman instructed certain employees to intercept auditors' telephone calls. The employees placed a secret recording device on a telephone line in a Walterman Implement conference room used by auditors.

Walterman used the information contained in the recordings to conceal the scheme to defraud the lenders.


Leon Walterman, the former owner, President, and CEO of the company, pled guilty to a three-count information charging him with mail fraud, money laundering, and illegal wiretapping. 
He faces a possible maximum sentence of 45 years' imprisonment, a $1million fine, $300 in special assessments, and 13 years of supervised release following any imprisonment.

Two employees, Alan Scott and Donna Zmolek, pled guilty to mail fraud.  They each face a possible maximum sentence of 20 years' imprisonment, a $250,000 fine, a $100 special assessment, and 5 years of supervised release following any imprisonment.

Employees Gary Miller and Allen Wulf pled guilty to illegal wiretapping.  Each face a possible maximum sentence of 5 years' imprisonment, a $250,000 fine, a $100 special assessment, and 3 years of supervised release following any imprisonment.

 

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