The owner of a Hunterdon County luggage manufacturing company admitted Thursday to defrauding Oak Ridge's Lakeland Bank of $3 million, the U.S. Attorney's Office said.
Richard Rekuc, 59, of Asbury Park, pleaded guilty to one count of bank fraud and faces up to 30 years in prison and a $1 million fine when he's sentenced in May.
According to U.S. Attorney Paul J. Fishman, Rekuc obtained a credit line from Lakeland Bank for his Phillipsburg luggage manufacturing company, Royalox International Inc.
The credit line was based on Royalox's accounts receivable, meaning the higher the company's sales, the more it could borrow from the credit line, Fishman said.
Rekuc submitted false invoices and copies of payments to Lakeland between 2004 and 2009 in order to draw on his line of credit, an investigation led by the Federal Deposit Insurance Corp. revealed, according to Fishman.
"Rekuc first opened fake bank accounts in names very similar to some of the clients with whom Royalox did business," Fishman said. "Rekuc moved money from bank accounts he controlled to the fake accounts. He then created fictitious invoices, billed the fictitious 'companies,' and made payments from the fake company accounts to Royalox. Rekuc submitted the false invoices and the copies of the payments from the fake company accounts to the Royalox accounts."
The false documents made it appear Royalox was doing a "substantial amount of business" and allowed the company to draw off the accounts receivable credit line, Fishman said. However, Rekuc was "pocketing the money," Fishman said. The scheme cost the bank $3 million, Fishman said.
Rekuc will be sentenced on May 6.