Jail terms for loan fraud

Three former executives of USA Dry Van Logistics (USADV), a trucking company operating across the US/Mexico border, have received jail sentences for their attempts to defraud GE Capital of some $26 million by wire fraud, following a trial in Texas.

Former CEO Sergio Lagos, former chief operations officer Aurelio Aleman and former controller Oscar Barbosa all pleaded guilty to the charges, which related to a financing agreement that Aleman and Lagos entered into with GE Capital for a revolving line of credit that was secured by the trucking company’s accounts receivables.

Lagos admitted to scheming to defraud GE Capital by concealing from the creditor the truth about USADV’s declining operating performance and financial results to make it appear that the company was more profitable than it was.

Lagos falsified documents that inflated the amount of the company’s accounts receivables and submitted them to GE Capital to obtain more funds than would have been permitted, according to the FBI. He also directed other employees to invoice millions of dollars of fraudulent receivables and forged invoices to support documentation for accounts receivables that did not exist.

As a result of these actions, USADV went into bankruptcy and re-organized under Chapter 11 proceedings and is operating with new owners.

Lagos was sentenced to 97 months in federal prison, Aleman will serve around four years and Barbosa was sentenced to two years. The three were also ordered to pay $15.9 million to GE Capital.