A U.S. Federal Court judge sentenced Joseph M. Braas, former COO of Equipment Finance Inc., to 15 years in prison for his role in a six-year fraud scheme that resulted in $53 million in losses to EFI and its parent companies, the Philadelphia Inquirer reported.

According to court documents, Braas “organized and oversaw a sophisticated and destructive commercial fraud scheme of exceptional magnitude. Braas and others repeatedly made loans to fictitious borrowers, recorded fictitious payments, concealed delinquent loans and created numerous false records to disguise the true financial status of his employer from auditors and its parent entities. Ultimately . . . this long-running criminal scheme snowballed out of control, eventually resulting in losses to EFI and its parent companies of at least approximately $53 million. In addition, the scheme caused the demise not only of EFI, but also its parent, the Bank of Lancaster County and its parent, Sterling. It also took a significant human toll, as hundreds of innocent employees lost their employment during the reorganizations that occurred at Sterling after the fraud was uncovered.”

Sentencing of former EFI employees Michael Schlager and Mary Stankiewicz is scheduled for this month, and sentencing of Misty and Curtis Kroesen is scheduled for October. Sentencing of Alabama businessman John Tomberlin is also slated for later this month and sentencing for John Wiley Spann is slated for January 2013, according to court documents.

Previously on monitordaily Sentencing for Five EFI Defendants Postponed, published May 2, 2012

To read the Philadelphia Inquirer articleclick here.