stickyimage

Fraud Friday — French National Indicted For $6 Million Fraud Scheme

Tags: , ,

August 9, 2019

By Caity Witucki
Contributing Editor, Fraud Friday

Fraud Friday — French National Indicted For $6 Million Fraud Scheme

Giles Casse, a French national, is facing indictment for a $6 million bank fraud scheme in which he made false statements to obtain government-issued loans and enter into a factoring agreement.

In 2000, Casse started a company in Louisiana called Nolatek. Nolatek bought used electronic testing parts, restored the parts, and resold them for a profit. On behalf of Nolatek, Casse applied for several loans, two of which were backed by U.S. Government guarantors.

Allegedly in 2007, Casse hired an appraisal company to perform economic evaluations but provided the company with inflated estimates of Nolatek’s inventory purchase costs. The appraisal valued Nolatek’s inventory at over $21 million. The fraudulent appraisal was then used to apply for a loan backed by the U.S. Department of Agriculture (USDA). When Nolatek defaulted on the loan in 2009, the same inventory that had been valued at over $21 million sold for only $64,000. USDA paid $2,107,259 to make good on the loan guarantee and the Bank suffered a loss of $900,000.

In 2009, Casse obtained a $1 million SBA loan by providing First NBC Bank with grossly inflated appraisals and fraudulent invoices as collateral. When Casse defaulted on this loan, the SBA was forced to pay $774,041 to honor its guarantee and First NBC Bank took a $225,000 loss.

Finally, in 2009, Casse entered into a factoring agreement with Gulf Coast Bank in which he agreed to sell Nolatek’s accounts receivables for cash. When Casse entered into the arrangement, he submitted fictitious invoices which claimed that Nolatek sold $1.3 million of merchandise in July, August and September. In reality, Nolatek only sold $17,200 of merchandise during that period. When Casse defaulted on the factoring agreement, the bank lost $2 million.

On July 25, 2019, the Louisiana Grand Jury charged Casse with four counts of Bank Fraud. If convicted, Casse faces a maximum prison sentence of thirty years per count and a maximum fine of $1 million per count.

2 months ago by in . You can follow any responses to this entry through the | RSS feed. You can leave a response, or trackback from your own site.