(BizSense file photo)
Correction: An earlier version of this story incorrectly reported the charges against Patrick Lindsey as one count each of wire fraud and bank fraud. He was in fact charged with one count of conspiracy to commit wire fraud and bank fraud.
Nearly two years to the day after MGT Construction toppled into bankruptcy in the face of a massive accounting scandal, federal authorities have charged one of the alleged conspirators with criminal fraud.
Patrick Lindsey, who until 2016 was a vice president at Thalhimer-owned MGT, was charged Tuesday by the U.S. Attorney’s Office with one count of conspiracy to commit bank fraud and wire fraud.
Lindsey and “others known and unknown” allegedly orchestrated a five-year scheme that manipulated MGT’s books by moving expenses from one construction project to another in order to make completed jobs appear more profitable.
That resulted in boosted bonuses for Lindsey and others, the charges allege, while racking up tens of millions of dollars in debt for MGT, which had been a wholly owned subsidiary of Richmond real estate giant Thalhimer.
“During the course of the conspiracy, Lindsey moved (or deleted) thousands of invoices, concealing the fact that – by the end of the conspiracy – MGT Construction was at least $28 million in debt,” the criminal pleading said.
Lindsey was charged Feb. 18 via a so-called criminal information charge, which does not require a grand jury indictment. Lindsey was not arrested as part of the charge. He is due to make his initial appearance in court for a bond hearing at 2 p.m. March 2 before Magistrate Judge Roderick Young. That will be followed by a plea agreement hearing at 2:30 p.m. before District Judge M. Hannah Lauck.
Lindsey is represented by attorney Ted Bruns of Richmond firm Blackburn Conte Schilling & Click. Bruns said Thursday he and his client have no comment on the case.
Thalhimer CEO Lee Warfield had no comment on the Lindsey matter, other than to say “our company has continued to fully cooperate with the authorities.”
The case against Lindsey marks the first criminal allegations to result from MGT’s collapse in February 2018, which left in its wake hundreds of creditors owed millions of dollars. Its bankruptcy case continues to play out in Richmond, while federal authorities began investigating for potential criminal claims last year. BizSense reported last spring that the FBI, IRS and U.S. Postal Service were questioning former MGT employees, as well as current and former Thalhimer employees.
While this week’s filing states Lindsey was “acting at the direction of his co-conspirators,” no other criminal charges have yet to be filed against any former MGT employees.
Thalhimer has alleged in MGT-related civil cases that Lindsey has admitted to shifting costs and stated under oath during bankruptcy hearings that former longtime MGT President Mike Logan Sr. directed him to do it.
Logan has not been named as a party to any MGT-related cases, civil or criminal, according to court filings as of Thursday afternoon.
Logan, through court documents and through his attorney last year, has previously denied any participation in the accounting scheme.
It is alleged that Lindsey participated in the scheme from at least 2011 until the time of his firing from MGT in November 2016, after Thalhimer said it internally discovered the accounting problems.
Previous court filings claim Lindsey received $202,000 worth of bonuses from 2011 to 2015.
(BizSense file photo)
Correction: An earlier version of this story incorrectly reported the charges against Patrick Lindsey as one count each of wire fraud and bank fraud. He was in fact charged with one count of conspiracy to commit wire fraud and bank fraud.
Nearly two years to the day after MGT Construction toppled into bankruptcy in the face of a massive accounting scandal, federal authorities have charged one of the alleged conspirators with criminal fraud.
Patrick Lindsey, who until 2016 was a vice president at Thalhimer-owned MGT, was charged Tuesday by the U.S. Attorney’s Office with one count of conspiracy to commit bank fraud and wire fraud.
Lindsey and “others known and unknown” allegedly orchestrated a five-year scheme that manipulated MGT’s books by moving expenses from one construction project to another in order to make completed jobs appear more profitable.
That resulted in boosted bonuses for Lindsey and others, the charges allege, while racking up tens of millions of dollars in debt for MGT, which had been a wholly owned subsidiary of Richmond real estate giant Thalhimer.
“During the course of the conspiracy, Lindsey moved (or deleted) thousands of invoices, concealing the fact that – by the end of the conspiracy – MGT Construction was at least $28 million in debt,” the criminal pleading said.
Lindsey was charged Feb. 18 via a so-called criminal information charge, which does not require a grand jury indictment. Lindsey was not arrested as part of the charge. He is due to make his initial appearance in court for a bond hearing at 2 p.m. March 2 before Magistrate Judge Roderick Young. That will be followed by a plea agreement hearing at 2:30 p.m. before District Judge M. Hannah Lauck.
Lindsey is represented by attorney Ted Bruns of Richmond firm Blackburn Conte Schilling & Click. Bruns said Thursday he and his client have no comment on the case.
Thalhimer CEO Lee Warfield had no comment on the Lindsey matter, other than to say “our company has continued to fully cooperate with the authorities.”
The case against Lindsey marks the first criminal allegations to result from MGT’s collapse in February 2018, which left in its wake hundreds of creditors owed millions of dollars. Its bankruptcy case continues to play out in Richmond, while federal authorities began investigating for potential criminal claims last year. BizSense reported last spring that the FBI, IRS and U.S. Postal Service were questioning former MGT employees, as well as current and former Thalhimer employees.
While this week’s filing states Lindsey was “acting at the direction of his co-conspirators,” no other criminal charges have yet to be filed against any former MGT employees.
Thalhimer has alleged in MGT-related civil cases that Lindsey has admitted to shifting costs and stated under oath during bankruptcy hearings that former longtime MGT President Mike Logan Sr. directed him to do it.
Logan has not been named as a party to any MGT-related cases, civil or criminal, according to court filings as of Thursday afternoon.
Logan, through court documents and through his attorney last year, has previously denied any participation in the accounting scheme.
It is alleged that Lindsey participated in the scheme from at least 2011 until the time of his firing from MGT in November 2016, after Thalhimer said it internally discovered the accounting problems.
Previous court filings claim Lindsey received $202,000 worth of bonuses from 2011 to 2015.
The facts listed and plea agreement simply mean the real charges are pending again the “others” in the scheme. It will be interesting to see who at Thalhimer or MGT, either current or former, get criminally charged.
In other words Mr. Lindsey has flipped?
Well, here we go again.
I am really starting to think if the white collar crime enforcement branches of the government had not been curtailed so much by all the money influencing our political system that there would be ten times as many cases on the dockets as there are now.
Who approved painting their logo sideways on the building like that? That just looks like poor planning all around. Red flag central.