Sticky-Fingered Boss Gets 9 Years
7/30/2014 6:23:00 AM,
SHERMAN, Texas (CN) - The former president of Advanced Materials Inc. was sentenced Tuesday to 9 years in federal prison for inflating the company's earnings to get more loans.
William Guy Mortensen, formerly of Plano, was sentenced to 110 months in prison. Mortensen pleaded guilty to bank fraud in August 2012. U.S. District Judge Ron Clark also ordered him to pay $2 million in restitution.
Prosecutors said Mortensen asked Chase Bank in July 2007 to enlarge an existing line of credit for the Garland-based company, to be secured by Advanced Materials' accounts receivables.
"Mortensen inflated the accounts receivable numbers to make the company's financial condition appear better than it actually was," resulting an increase to $2 million, prosecutors said in a statement after the sentencing.
In June 2010, the SEC made similar accusations against Mortensen and Advanced Materials accounting employee Feng Zheng, in a securities fraud civil lawsuit in Dallas Federal Court.
The SEC said then that Mortensen had "committed securities fraud, lied to accountants, falsified records and circumvented internal controls, and aided and abetted reporting, record-keeping and internal control violations."
The SEC said Mortensen "misappropriated hundreds of thousands of dollars" from the company "to pay such personal expenses as a country club membership, extensive home remodeling, property taxes, and family vacations to Florida, Europe and elsewhere using private jets."
Advanced Materials could not be reached for comment Tuesday evening.