Senior Managers Charged With Bank Fraud Conspiracy

The senior managers of GDC Acquisitions, LLC, have been charged with bank fraud conspiracy arising out of their alleged scheme to use false financial statements to obtain $21 million in loans from Amalgamated Bank. The defendants are Courtney Dupree, GDC’s president; Rodney Watts, chief investment officer; Thomas Foley, chief operating officer; and Frank Patello, former chief financial officer. GDC is a holding company that owns various subsidiaries, including JDC Lighting, a lighting distributor; Unalite Electric and Lighting, a lighting maintenance company; and Hudson Bay Environments Group, a furniture distributor. 

As alleged in the complaint: The defendants gave Amalgamated Bank financial statements for GDC on which they had fraudulently inflated the company’s accounts receivable in order to obtain initially, and then maintain, credit lines totaling approximately $21 million. For example, the defendants represented to Amalgamated Bank in writing in November 2009 that GDC had $25.2 million in accounts receivable when, in fact, it had only $9 million. The conspirators inflated the accounts receivable by a variety of means, including by booking fictitious sales. In addition, the conspirators defrauded Amalgamated Bank by causing GDC to acquire a company covertly, contrary to the terms of their loan agreement, and by concealing the acquisition from the bank.