Man denies fraud charge
Toolbox
By Brent Curtis Staff Writer - Published: November 5, 2009
The former director of finance for Specialty Filaments in Burlington and Middlebury pleaded innocent Wednesday to a federal charge of bank fraud.
Paul Mammorella, 54, of Williston, appeared in U.S. District Court in Burlington to answer the charge that he submitted false reports to Wells Fargo, eventually costing the company $1 million. Mammorella was released on conditions pending a trial that has not been scheduled, the U.S. Attorney's Office in Vermont said.
Specialty Filaments went bankrupt in 2007 and was bought by the Illinois-based Monahan Filaments. Monahan announced in September it would close the plant on Case Street in Middlebury. The company made filaments for use in products ranging from industrial brushes to toothbrushes.
According to the indictment, Specialty Filaments had a line of credit with Wells Fargo allowing them to borrow 85 percent of the value of its last 90 days worth of accounts receivable and 50 percent to 66 percent of the value of its inventory.
The company had to give Wells Fargo periodic reports on its collateral so the bank could adjust its credit line.
Federal prosecutors said Mammorella falsified those reports from June to December of 2006, inflating the company's accounts receivable and its inventory, getting the bank to loan substantial sums of money.
Mammorella's alleged actions cost Wells Fargo and the Vermont Economic Development Authority, which guaranteed a portion of the loan, $1 million when Specialty Filaments went bankrupt, the U.S. Attorney's Office said.
Mammorella faces up to 30 years in jail and a $1 million fine if convicted.
brent.curtis@rutlandherald.com
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