Richard Kaufman, of Pittsford, has been sentenced by U.S. District Court Judge Frank P. Geraci Jr. to 46 months in prison.
A jury found Kaufman guilty of bank and loan fraud and conspiracy to commit bank and loan fraud. He was also ordered to pay $1,360.894 in restitution.
Kaufman and his father, Michael C. Kaufman, directed the controller of American Industrial Sales, doing business as RAK Industries, to provide false financial statements to Key Bank, and to the company’s outside accounting firm between 2002 and June 2008, according to Assistant U.S. Attorneys Craig R. Gestring and Bradley E. Tyler.
The false financial statements significantly overvalued the accounts receivable and inventory, which were the two assets that Key Bank relied upon as collateral for a total loan credit of $2 million.
The loan proceeds were used by the defendants to fund their personal lifestyles including expensive homes, generous salaries and country club memberships. After the defendants defaulted in the summer of 2007, they converted to their personal use approximately $53,000 of accounts receivable proceeds that were the property of Key Bank. As a result of the fraud scheme, Key Bank suffered an immediate loss of more than $1.5 million.
Michael Kaufman was also convicted at trial and is awaiting sentencing.