Friday, July 21, 2006
Ind. Decisions - $8.7 million restitution upheld in Monon fraud
Charles Wilson of the AP has this story today, published in the Louisville Courier Journal, on Wednesday's ruling by Judge Easterbrook of the 7th Circuit in the case of USA v. Rosby. (See ILB entry here - 2nd case.) Some quotes:
A federal appeals court has ruled against two former Monon Corp. executives who argued that they should not have to repay millions of dollars taken in a corporate fraud because lenders should have noticed something was wrong.
On Wednesday the 7th U.S. Circuit Court of Appeals in Chicago upheld the convictions and sentences of Thomas Rosby and John Franklin, including requirements that they pay $8.7 million in restitution to three lending institutions.
Prosecutors said Rosby, Monon's chief executive, and Franklin, the chief financial officer, tricked three lenders into making loans to the company so they could finance lavish lifestyles while the cargo-trailer maker slid toward bankruptcy in the 1990s.
The former executives argued in their appeal that the lenders should have more closely examined their dealings with the company, which was based in the Northern Indiana town of Monon. * * *
"Telling the truth is cheap, while nosing out deceit is expensive," Judge Frank Easterbrook wrote. "Requiring all lenders, investors, and so on to investigate every representation made to them would be extravagantly wasteful."
Posted by Marcia Oddi on July 21, 2006 08:12 AM
Posted to Ind. (7th Cir.) Decisions