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Equipment Finance Inc. Officer to Testify in Loan Fraud Case

April 10, 2012, 07:45 AM
Filed Under: Industry News
Related: Fraud

Lancaster Online reported that a leader of the Equipment Finance Inc. loan fraud will testify against two of his former employees, whose trial starts Tuesday in Philadelphia.
According to the report, Joseph M. Braas, EFI's senior vice president and chief operating officer, will be a key witness in the trial of Curtis A. and Misty L. Kroesen. Braas, who has admitted his role, "will testify concerning the scheme and the actions taken" by the defendants, the U.S. Attorney's Office said.  The Kroesens were among eight people indicted in November 2010 for allegedly participating in EFI's scheme. Prosecutors describe Curtis Kroesen as an account executive who originated and serviced loans and Misty Kroesen as an accounting clerk who entered data, cut checks and maintained account records.

According to the report, Braas, along with Michael J. Schlager, EFI's executive vice president, devised and ran the scheme whereby the Kroesens carried out orders from Braas and others to create fake documents, improperly shift funds and fool auditors, they allege.

Taking the stand to discuss the fraud's impact on EFI's parent firm, Sterling Financial Corp., will be J. Roger Moyer Jr., then president and chief executive officer of Sterling.

EFI was acquired by Sterling in 2002 and made a subsidiary of Bank of Lancaster County. Once it became a part of Sterling, EFI's loan portfolio grew quickly, quadrupling to about $330 million and generating significant profits. But as it turned out, many of the loans were fictitious.

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