6Th Guilty Plea In Efi Loan Fraud [Intelligencer Journal (Lancaster, PA)]

Business Editor

An Alabama businessman this week admitted his role in the Equipment Finance Inc. loan fraud case.

Harold W. Young, president of South Central Agency, an insurance company in Andalusia, Ala., faces sentencing July 18.

Young pleaded guilty to one count of wire fraud affecting a financial institution for his actions from 2003 to 2007.

Three money-laundering counts were dropped.

Young entered his plea Monday in Philadelphia federal court. Specifics of his plea were disclosed Wednesday by the U.S. Attorney's Office.

EFI was a small West Airport Road firm that made loans to logging and land-clearing firms so they could buy new equipment.

It had been acquired by Sterling Financial Corp., parent of Bank of Lancaster County, in 2002.

The loan fraud, directed by two high-level EFI executives, created fictitious loans to imaginary customers and glossed over the risks of real loans.

These maneuvers were done to make EFI appear bigger and healthier than it really was to justify raises and bonuses.

As part of the ruse, Young submitted false invoices for nonexistent insurance policies on that nonexistent equipment via fax to EFI.

The bogus invoices caused EFI to send $1.05 million to SCA.

Young faces a maximum sentence of 30 years in prison, a $1 million fine and full restitution.

Young is the sixth of eight EFI defendants indicted in November 2010 to plead guilty.

The trial for the remaining two, Misty Kroesen and her husband, Curtis, of Manheim, scheduled to start this week, has been delayed until Monday in Philadelphia federal court.

[email protected]