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Scott C. Wagner, owner of Construction Equipment & Supply in Sandusky, Ohio, has been sentenced to 75 months in prison in a phony bill scam, reports The Toledo Blade. The judgment also included a $25,000 fine.
In July, a jury convicted Wagner of 26 counts related to fraud involving two clients; he later pleaded guilty to charges related to another client, reports the paper. The charges involved phony equipment rental and purchase invoices to Castalia Farms, a corporate retreat owned by Owens-Illinois; Kyklos Bearing International in Sandusky and Sawyer Structural Steel in Holland.
Several other people have been sentenced in the fraud scheme, including Michael Conrad, former manager of Castalia Farms, who received five years in prison; George Dunlap III, former co-owner of Construction Equipment & Supply, who was put on probation for two years with six months on electronic monitoring; and Tom Walters Jr., a former employee of Sawyer Steel, who was placed on probation for four years with the first four months on electronic monitoring.
Presiding U.S. District Court Judge Jack Zouhary called the operation “a significant fraud perpetrated on a number of people over a long period of time,” reports the paper, which also recorded this exchange between Wagner and Zouhary:
Wagner: “I’ve done a lot of good in the community, a lot of good in business. I just happen to have made some bad mistakes, and I regret the mistakes I’ve made.”
Zouhary: “You didn’t just happen to make some bad mistakes. You made some whoppers, and you made them continually, and you made them with forethought.”
According to the paper, in July, federal prosecutors presented evidence that around 2001, Wagner sent phony invoices from Construction Equipment & Supply to Owens-Illinois that were approved by Conrad, a longtime general manager of the firm’s Castalia Farms operation. Owens-Illinois then paid the invoices. The false bills included $380,000 for rental of a tub grinder, which was actually just rented for three weeks, but billed for more than 20 months. Another $223,000 was billed for a tractor with a boom mower, even though Castalia Farms owned its own boom mower.
Prosecutors said the false bills were kickbacks for Conrad’s business. Conrad then used the money for personal expenses, including a $30,000 Snap-on toolbox, according to the paper. Wagner’s defense blamed the scheme on Construction Equipment & Supply former co-owner Dunlap.