EFI Loan Fraud Defendant Spann Pleads Guilty



According to documents filed in the U.S. District Court for the Eastern District of Pennsylvania, John Wiley Spann, a defendant in the EFI fraud case, pleaded guilty in a change of plea hearing on July 25, 2011 to conspiracy, mail fraud affecting a financial institution and money laundering.

He will be sentenced on December 15 and faces a maximum of 45 years in prison a maximum fine of $2.5 million. He was also ordered to forfeit all proceeds he received from the fraud.

Spann, of Andalusia, AL, was a logging equipment dealer who colluded with Michael J. Schlager, senior vice president of EFI, and other co-defendents to create hundreds of fictitious EFI loans. Spann assisted the conspiracy by recruiting and paying nominal borrowers that signed false EFI loan paperwork and provided their personal identifying information, sometimes in exchange for payment, according to court documents.

Sentencing of co-defendants Joseph M. Braas, Michael J. Schlager, Mary C. Stankiewicz is scheduled for November 2011. John S. Tomberlin is set to plead guilty on August 15.

The trial for the remaining defendants, former EFI employees Misty L. Kroesen and her husband Curtis A. Kroesen, and Alabama businessman Harold W. Young is scheduled for October 25, 2011.

As previously reported on monitordaily, EFI was a logging industry lender that provided financing for the purchase of forestry and land clearing equipment, primarily in the southeastern U.S. According to the indictment, from the time it was acquired by Sterling Financial in March 2002, until April 2007, the value of EFI’s loan portfolio grew on paper from approximately $80 million to approximately $330 million. Sterling was subsequently acquired by PNC Financial in April 2008.

Braas, Schlager, Stankiewicz, the Kroesens, all from Lancaster County, and Spann, Tomberlin and Young, all from Alabama, were indicted with conspiracy to commit mail fraud and mail fraud, all arising out a massive, sophisticated loan fraud scheme that resulted in a loss of $53 million.

It is alleged in the indictment that as far back as 2001, before EFI was acquired by Sterling, the defendants, which include five former EFI employees, were engaging in a systematic fraud at EFI. From 2001 through 2007, they are charged with colluding in a pervasive scheme to steal money by looting the accounts of EFI and falsifying EFI’s books.

Previously on monitordaily: Fifth EFI Fraud Defendant Tomberlin To Plead Guilty

Equipment Finance Loan Fraud Defendant Guilty Plea Scheduled

Sentencing of Three Defendants in EFI Loan Fraud Case Postponed

Sentencing of Third Defendant in EFI Loan Fraud Case Postponed

Sentencing of Second Defendant in EFI Loan Fraud Case Postponed

Sentencing of Key Figure in EFI Loan Fraud Case Postponed


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