Posted: 8/25/04
By MaryHelen Swanson
Daniel P. Richmann, the former owner of Riverwoods Development Co., Inc., was sentenced Aug. 17 to 24 months in prison for his role in a $1.4 million bank fraud scheme.
Judge John Tunheim also ordered Richmann to pay $670,930 in restitution to the Federal Deposit Insurance Corporation.
Richmann, 53, from Ramsey, pleaded guilty in October 2003 to conspiracy to commit bank fraud beginning in or about November 1996 and continuing to April 2000.
In exchange for his plea of guilty and acceptance of responsibility, the government agreed not to further charge Richmann with any offense known to the government as of the date of the guilty plea, and among other things, to recommend that the Court adjust downward the defendantís offense level for acceptance of responsibility, provided that Richmann commits no further crime.
It was also recommended in the plea agreement that Richmann complete a 500-hour drug abuse treatment program while in custody of the Bureau of Prisons.
A co-defendant in the case, John C. James, 58, from Lindstrom, the former chairman of the board of the Town and Country Bank in Almelund, pleaded guilty in September 2003 to conspiracy to commit bank fraud and money laundering. A sentencing date for James has not been set.
According to the United States Attorneyís office, Richmann and James used the Town and Country Bank as a private source of money, in that James repeatedly authorized loans to Richmann that exceeded the legal lending limits of the bank, and concealed the true purpose of the loans by using nominees as the borrowers and preparing loan documents that contained materially false information.
Richmann and James created the false appearance that so-called loans were being repaid, when in fact, the U.S. Attorneyís office said, the purported payments were made with the bankís own money in the form of new loans made by the bank.
Richmann used the funds for his companies.
The Almelund bank, with an office also in Harris, was declared insolvent July 14, 2000, and the Federal Deposit Insurance Corporation took control of the institution. Several of the bankís assets were sold to other financial institutions.
The case is the result of an investigation by the Federal Deposit Insurance Corporation Office of Inspector General, the Internal Revenue Service - Criminal Investigation and the Federal Bureau of Investigation.
Assistant United States Attorney David. J. MacLaughlin prosecuted the case.
According to the indictment statement, Richmann faced a maximum penalty of five years in prison and/or a $250,000 fine for conspiracy, up to 30 years in prison and/or a $1 million fine on each count of bank fraud and false banking entries and up to 20 years in prison and/or a $500,000 fine for money laundering
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