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Greensburg businessman gets 2 years for bogus SBA-backed loan

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Tuesday, Feb. 26, 2013, 12:01 a.m.
 

A federal judge on Monday sentenced a Greensburg businessman to two years in prison for defrauding the Small Business Administration on a $1 million loan and a White Oak investor on a $400,000 loan.

Thomas Kemerer, 65, pleaded guilty in April to one count of wire fraud. Co-defendant James “Mick” Conde, 65, of Harrison City pleaded guilty to the same charge in May and is scheduled to be sentenced April 5.

Kemerer and Conde operated Precision Powder Coating and Graphics in Jeannette. They told Sky Bank, which provided the SBA-backed loan, and the private investor that they would use the $1.4 million to buy equipment when they used it for personal and living expenses, prosecutors said.

Conde and Kemerer used bogus documents to secure a $1 million loan from Sky Bank and another loan of $400,000 from private investor Wayne King of White Oak.

The scheme ran from 2002 to 2003, according to the indictment. Conde and Kemerer established Precision Powder Coating & Graphics in Jeannette in 2002, and it went out of business in 2005.

The company was going to powder coat and etch metal parts for vehicles and equipment. Conde served as president, and Kemerer was chief financial officer.

The company defaulted on the Sky Bank loan, which was guaranteed by the Small Business Administration, and the company never repaid King.

King wrote sentencing Judge Nora Barry Fischer demanding the sentence include repayment of the money.

“They liked to get money from me. They made false invoices. ... They paid themselves the money,” King complained.

Conde, who restores vintage cars, claimed to have vehicles and a stockpile of parts valued at $750,000 as collateral for the loan, but federal officials said those amounts were false.

In another instance, the grand jury alleges, Conde and Kemerer made up a document indicating they paid $300,000 to Industrial Finishing Systems for equipment when, in fact, no payment was made.

Kemerer took an unknown person to a notary to pose as president of Industrial Finishing Systems to verify that Kemerer had made the payment, according to the indictment.

The two men created false invoices that they submitted to the bank and other bogus documents to purchase forklifts, it said.

A key witness in the case was another Jeannette businessman, Frank Trigona, who testified before the grand jury under a grant of immunity. Trigona provided blank invoices to the pair, according to court documents.

Trigona owns the Penn Avenue building where PP&G was located.

Conde and Kemerer filed for bankruptcy in 2005. A bankruptcy judge questioned the accuracy of their financial statements.

When Conde applied for the SBA loan through Sky Bank, he listed $2.8 million in assets and $328,000 in liabilities, according to court records.

His bankruptcy petition listed $31,000 in assets and more than $1.5 million in liabilities. The judge noted Conde's financial records were so sloppy that it was impossible to trace their history.

Fischer also sentenced Kemerer to three years of probation and ordered him to pay about $1.8 million in restitution.

Paul Peirce is a staff writer for Trib Total Media. He can be reached at 724-850-2860 or ppeirce@tribweb.com.

 

 
 


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