Manning pleaded guilty in the federal courthouse in Richmond.
Fallout from a local contractor’s guilty plea on federal tax charges last month has forced at least one area bank to take a hit on its balance sheet.
Michael Manning, 52, who ran Manning Construction and Manning-Carhen Construction, pleaded guilty on Feb. 23 to deliberately not collecting or paying more than $800,000 in employment taxes to the IRS.
The case also revealed that Manning lied on loan documents to banks in order to keep money flowing to his businesses.
Consequently, Bank of Lancaster, a Kilmarnock-based bank that has made a push into Richmond in recent years, disclosed last week that it is forced to revise its 2015 year-end earnings “as a result of fraud perpetrated by one of the Bank’s commercial borrowers.”
While the bank didn’t identify the perpetrator in the SEC filing and the federal case didn’t identify Bank of Lancaster, local court records show that the bank was a victim of Manning’s actions.
The bank, which declined to comment on the matter, said in a regulatory filing from its parent company that it had five loans with Manning and his companies totaling $2.2 million. The bank has since foreclosed on Manning’s home and office property used as collateral on the loans.
It said in court filings in Lancaster County that it also independently discovered that Manning made false statements to the bank as an inducement for loans.
One of Bank of Lancaster’s two Richmond branches sits at the corner of Libbie and Patterson.
The bank said in its SEC filing that the Manning issue will decrease the bank’s net income for the year to $366,000 from $822,000 and increased its loss for the fourth quarter from $134,000 to $590,000.
Nevertheless, Bank of Lancaster’s capital levels remain strong according to regulatory standards. It said the adjustment is not expected to affect prior fiscal quarters.
Court filings suggest that Bank of Lancaster isn’t the only bank that fell victim to Manning. The Department of Justice said Manning admitted to regularly and deliberately creating false financial statements that were submitted to “financial institutions.”
The government did not identify any of the affected institutions and BizSense was unable to immediately identify others by press time.
As for Manning’s businesses, the companies were put into an emergency receivership, as ordered by Lancaster County Circuit Court after demands by Bank of Lancaster.
Records show that at least five construction jobs under contract to Manning Construction are subject to performance bonds. Bank of Lancaster is now jockeying for position with several surety companies for the rights to Manning’s business assets. Bonding companies typically step in in such instances to take over construction jobs gone awry.
Manning now awaits a May 31 sentencing hearing where he’ll face the potential for up to five years in prison, restitution and fines. He is allowed to remain free until sentencing.
The case was brought by the Department of Justice’s Tax Division. U.S. Attorney Dana Boente worked the case for the government, along with assistant U.S. Attorneys Jasmine Yoon and Thomas Garnett.
Brian Stolarz, an attorney out of LeClairRyan’s Northern Virginia office, is representing Manning. He declined to comment.
Manning pleaded guilty in the federal courthouse in Richmond.
Fallout from a local contractor’s guilty plea on federal tax charges last month has forced at least one area bank to take a hit on its balance sheet.
Michael Manning, 52, who ran Manning Construction and Manning-Carhen Construction, pleaded guilty on Feb. 23 to deliberately not collecting or paying more than $800,000 in employment taxes to the IRS.
The case also revealed that Manning lied on loan documents to banks in order to keep money flowing to his businesses.
Consequently, Bank of Lancaster, a Kilmarnock-based bank that has made a push into Richmond in recent years, disclosed last week that it is forced to revise its 2015 year-end earnings “as a result of fraud perpetrated by one of the Bank’s commercial borrowers.”
While the bank didn’t identify the perpetrator in the SEC filing and the federal case didn’t identify Bank of Lancaster, local court records show that the bank was a victim of Manning’s actions.
The bank, which declined to comment on the matter, said in a regulatory filing from its parent company that it had five loans with Manning and his companies totaling $2.2 million. The bank has since foreclosed on Manning’s home and office property used as collateral on the loans.
It said in court filings in Lancaster County that it also independently discovered that Manning made false statements to the bank as an inducement for loans.
One of Bank of Lancaster’s two Richmond branches sits at the corner of Libbie and Patterson.
The bank said in its SEC filing that the Manning issue will decrease the bank’s net income for the year to $366,000 from $822,000 and increased its loss for the fourth quarter from $134,000 to $590,000.
Nevertheless, Bank of Lancaster’s capital levels remain strong according to regulatory standards. It said the adjustment is not expected to affect prior fiscal quarters.
Court filings suggest that Bank of Lancaster isn’t the only bank that fell victim to Manning. The Department of Justice said Manning admitted to regularly and deliberately creating false financial statements that were submitted to “financial institutions.”
The government did not identify any of the affected institutions and BizSense was unable to immediately identify others by press time.
As for Manning’s businesses, the companies were put into an emergency receivership, as ordered by Lancaster County Circuit Court after demands by Bank of Lancaster.
Records show that at least five construction jobs under contract to Manning Construction are subject to performance bonds. Bank of Lancaster is now jockeying for position with several surety companies for the rights to Manning’s business assets. Bonding companies typically step in in such instances to take over construction jobs gone awry.
Manning now awaits a May 31 sentencing hearing where he’ll face the potential for up to five years in prison, restitution and fines. He is allowed to remain free until sentencing.
The case was brought by the Department of Justice’s Tax Division. U.S. Attorney Dana Boente worked the case for the government, along with assistant U.S. Attorneys Jasmine Yoon and Thomas Garnett.
Brian Stolarz, an attorney out of LeClairRyan’s Northern Virginia office, is representing Manning. He declined to comment.