Owner gets #prison time in #Sandusky equipment rental #business #fraud case

The owner of a Sandusky-based construction equipment rental business was sentenced Monday to 75 months in prison for his role in a scheme to defraud three customers by submitting phony bills.

Scott C. Wagner, 53, of Perkins Township also was ordered by U.S. District Court Judge Jack Zouhary to pay a $25,000 fine.

Through his company, Construction Equipment & Supply, Wagner submitted fraudulent invoices for equipment rentals and purchases to Owens-Illinois, Inc.’s corporate retreat known as Castalia Farms, to Kyklos Bearing International LLC in Sandusky, and to Sawyer Structural Steel in Holland.

In July, a jury convicted Wagner of 26 counts related to the fraud with O-I and Kyklos Bearing. He later pleaded guilty to charges related to the Sawyer Steel scheme.

Judge Zouhary called the operation “a significant fraud perpetrated on a number of people over a long period of time.”

Wagner apologized to the court.

“I’ve done a lot of good in the community, a lot of good in business,” he said. “I just happen to have made some bad mistakes, and I regret the mistakes I’ve made.”

“You didn’t just happen to make some bad mistakes,” Judge Zouhary said. “You made some whoppers, and you made them continually, and you made them with forethought.”

Defense attorney Rick Kerger asked the court for leniency, saying Wagner — who is still running Construction Equipment & Supply — was in the best position of all the co-defendants in the case to pay what could be several million dollars in restitution to the three victims.

Last week, Judge Zouhary sentenced Michael Conrad, the former manager of Castalia Farms, to five years in prison for his part in the fraud he helped perpetuate with Wagner and others against O-I over nearly a decade.

Conrad, who pleaded guilty in 2015 to conspiracy to commit wire fraud and wire fraud, testified at Wagner’s trial as a condition of his plea agreement.

Also Monday, Judge Zouhary placed George Dunlap III, 44, of Huron, Ohio, on probation for two years with six months on electronic monitoring. He also ordered Dunlap to pay a $5,000 fine.

Dunlap, who owned 25 percent of Construction Equipment & Supply at the time of the scheme, pleaded guilty in 2015 to conspiracy to commit wire fraud and wire fraud. The judge noted that he provided substantial assistance and information to federal investigators.

Judge Zouhary also placed Tom Walters, Jr., 42, of Swanton — a former employee of Sawyer Steel — on probation for four years with the first four months on electronic monitoring. In August, Walters pleaded guilty to conspiracy to commit wire fraud for taking part with Wagner in the phony billing scheme.

Restitution for all of the co-defendants is to be determined at a later date.

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