A former Knox County business owner is facing multiple federal fraud charges for allegedly floating funds between the businesses costing National City and Whitaker banks more than $1.4 million when the checks written on one business account and deposited into another was returned due to insufficient funds.
Gregory Wilcheck, 52, of Corbin was indicted Thursday in U.S. District Court in London on two counts of defrauding a financial institution insured by the Federal Deposit Insurance Corporation.
According to background information provided in the indictment, the alleged fraud occurred between Oct and Nov. 2008.
Wilcheck, who was majority owner and operator of Myers Chevrolet-Oldsmobile-Cadillac, Inc., Tri-County Cycles in Barbourville, LLC, and Check Properties, LLC, allegedly wrote, or caused to be written, 567 checks for what the indictment describes as “loans between Wilcheck’s various businesses.”
The indictment indicted a number of these checks were for amounts in excess of $100,000.
One such example occurred on November 10, 2008 when check 1078 for $155,000 written on Myers Chevrolet’s National City Bank account was deposited into Myers’ Chevrolet’s Whitaker Bank account.
On the memo line of the check, it denoted the purpose was, cash transfer.”
That same day, check 5084, written on Myer’s Chevrolet’s Whitaker Bank Account in the amount of $150,000, was deposited into Myers Chevrolet’s National City Bank. One again, the memo denoted it as a, “cash transfer.”
As a result of this scheme, the indictment alleges that National City Bank lost approximately $1,130,873.69, and Whitaker Bank lost an additional $278,096.99 for a total of $1,408,870.68.
According to officials with the U.S. Attorney’s Office, the indictment was returned following an investigation by the U.S. Secret Service.
Originally created to investigate and prevent counterfeiting, according to the agency’s website, the Secret Service is also charged with, “safeguarding the payment and financial systems of the United States from a range of financial and computer-based crimes.”
While the maximum prison sentence is up to a year in jail, prosecutors are asking the court to order Wilcheck return all of the money. If all of the money cannot be located, has been spent or placed outside the jurisdiction of the court, prosecutors stated they intent to seek the forfeiture of any other property in which Wilcheck has an interest to make up the difference.
While one year is the maximum sentence under federal sentencing guidelines, should Wilcheck plead or be found guilty, the judge in the case is not bound to sentence within the guidelines.
According to the Kentucky Secretary of State website, Myers Chevrolet, Tri-County Cycles and Check Properties, are all out of business and the companies have been dissolved.