Three former USA Dry Van executives, Sergio Lagos, Aurelio “Jim” Aleman and Oscar Barbosa, have been arrested and accused of wire fraud and conspiracy to commit wire fraud.
According to a press release from the FBI, United States Attorney Kenneth Magidson announced the trio were arrested following the return of a six-count federal indictment charging wire fraud and conspiracy to commit wire fraud.
On August 27, 2013, the three were arrested. They’re expected to appear before U.S. Magistrate Judge Donna Ramos today.
Lagos is the former CEO of USA Dry Van Logistics, a cross-border trucking company. Aleman was the company’s chief operations officer and Barbosa is the company’s former controller.
According to the indictment, from March 2008 to January 2010, Lagos, Aleman and Barbosa allegedly ran a scheme to defraud GE Capital Bank a lending company that provided capital to USA Dry Van, by fraudulently obtaining funds through a revolving line of credit.
The FBI press release states that Lagos, Aleman and Barbosa allegedly schemed to conceal from GE Capital Bank the truth about USA Dry Van’s declining performance and finances. Rather than disclose the company’s true condition and value, the three allegedly inflated USA Dry Van’s performance and finances.
“According to the indictment, they misrepresenting to GECC the nature of the USADV’s accounts receivable, against which GECC was permitting USADV to borrow hundreds of thousands of dollars on a weekly basis. This caused USADV to appear to be operating more profitably that it actually was,” the press release states.
“Lagos and Aleman entered into a financing agreement with GECC under which GECC would issue a revolving line of credit which was secured by USADV’s accounts receivables. By January 2010, the maximum borrowing limit under the agreement was increased to $38 million. Pursuant to the agreement, USADV allegedly justified advances on the line of credit by submitting “borrowing base certificates” to GECC.”
Lagos, Almen and Barbosa allegedly prepared, and or directed others to prepare, certificates or documents with falsely inflated amounts or payments the company received. The three would then allegedly sign the documents and then submit them to GE Capital Bank.
“Lagos, Aleman, and Barbosa allegedly perpetuated and concealed the scheme to defraud GECC by directing other employees to manually invoice millions of dollars of fraudulent receivables to inflate the borrowing base and to create false and forged invoices and support documentation for accounts receivables that did not exist. Lagos, Aleman, and Barbosa also submitted false financial statements to auditors and GECC, according to the indictment,” the FBI press release states.
Ultimately, the truth about USA Dry Van’s finances was revealed and the company went into bankruptcy. USA Dry Van then successfully re-organized under Chapter 11 bankruptcy proceedings.
GE Capital Bank lost more than $26 million under the scheme.
USA Dry van is now under new ownership and Lagos, Aleman and Barbosa are no longer affiliated with the company.
Lagos, Aleman and Barbosa are facing up to 20 years in prison and up to a $25,000 fine for each of the six counts.
The investigation was conducted by the FBI and Homeland Security Investigations.
“A defendant is presumed innocent unless convicted through due process of law,” the FBI press release concluded.