Criminal Justice News

Tuesday, August 28, 2012

Pennsylvania Man Sentenced for Scheme to Defraud Chesapeake Bank

NEWPORT NEWS, VA—Bernard J. Stromberg, Jr., 41, of Morrisville, Pennsylvania, was sentenced today to 41 months in prison, followed by five years of supervised release, for conspiracy to commit bank and wire fraud. He was ordered to pay restitution of approximately $716,000.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia, made the announcement after sentencing by United States District Judge Arenda L. Wright Allen.

Stromberg plead guilty on January 25, 2012. According to court documents from July 2007 through December 2009, Stromberg was the chief financial officer of Atomica, a Pennsylvania design company that had a working relationship with Chesapeake Bank of Gloucester. In July 2007, Atomica entered into a “cash flow” banking agreement with Chesapeake Bank. Pursuant to the cash flow agreement, Atomica would “sell” invoices to the bank and receive immediate payment, less a small administrative fee and a 10 percent reserve. In exchange, Chesapeake Bank received all title, interest, and rights to the invoice and any funds which were due or would become due under the invoices. The customers would then remit payment due to a post office box owned by Chesapeake Bank in Gloucester, Virginia. This arrangement enabled Atomica to bill its customers for goods provided and services rendered and receive funds from the bank before the customers actually paid. The credit limit on this agreement initiated at $500,000 and was extended to $700,000 in April 2008.

From approximately February-December 2009, at Stromberg’s direction, over 250 false invoices were submitted to the bank to cover various Atomica shortfalls. These invoices related to fictitious entities, entities that had no business relationship with Atomica, and entities for which Atomica had not completed work. The invoices were spread out over various vendors, amounts, and time periods to further conceal their falsity and to prevent verification by the bank. The invoices were broken up and submitted under a threshold amount so as to avoid a requirement of submitting the actual invoice. Stromberg also submitted false financial information to the bank in an effort to increase Atomica’s line of credit. Atomica dissolved in December 2009, with approximately 90 percent of the outstanding invoices being fraudulent. The scheme resulted in losses to Chesapeake Bank of Gloucester in the amount of $716,000.

This case was investigated by FBI. Assistant United States Attorney Brian J. Samuels prosecuted the case on behalf of the United States.

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