A Knox County businessman, who pleaded guilty to defrauding two local banks of $1.4 million.
Through a scheme to float checks that were later returned because of insufficient funds, Fifty-three-year-old Gregory Joseph Wilcheck will serve three years in federal prison and must repay the money. Wilcheck returned to U.S. District Court in London Monday for a formal sentencing in the case.
Based on the pre-sentencing report, the sentencing range in the case was 46 to 57 months of incarceration.
“I assure you I am truly sorry,” Wilcheck said prior to the sentence being handed down.
U.S. District Court Judge Gregory VanTatenhove cited the amount of money involved, $1,408,870.68 from National City and Whitaker Banks, and the seriousness of the crime, in explaining how he reached the 36 month sentence.
“I know you are remorseful,” VanTatenhove said to Wilcheck, noting he was caught in some difficult and unique set of circumstances.
“I get the circumstances that you were facing,” VanTatenhove added. “You didn’t come up with a fraud scheme to get rich. You did it to save your business.”
However, VanTatenhove said while the circumstances were difficult, those are the times when entrepreneurs need to choose not to engage in criminal activity.
VanTatenhove added that Wilcheck’s lack of criminal history and the facts that he is not a dangerous person, nor is he likely to commit future crimes in explaining why he elected to sentence below the guidelines.
Under federal law, a judge is not bound to sentence within the guidelines and may elect to sentence above or below them.
Wilcheck must repay $1,130,870.69 to National City Bank and an additional $278,096.99 to Whitaker Bank.
VanTatenhove declined to fine Wilcheck, noting he does not have the means to pay it and any funds he has are better used toward making restitution. Upon completion of his sentence, Wilcheck will be placed on supervised release for five years.
In addition to refraining from alcohol and undergoing random drug testing while on supervised release, Wilcheck will be prohibited from incurring new credit charges or opening new credit lines without prior approval from the probation office.
Wilcheck, who owned Myers Chevrolet, Tri-County Cycles and Check Properties, was indicted in November on charges that he floated funds between accounts belonging to the respective businesses.
One such example given in the indictment 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.”
According to the indictment, Wilcheck wrote, or caused to be written 567 such checks. “I knew the money wasn’t there and I wrote the checks,” Wilcheck said at his rearraignement hearing in May.
At the sentencing hearing, Wilcheck said when credit dried up in 2008 as a result of the “great recession,” and he had used up his personal money, he resorted to this in an effort to keep his businesses open, to keep his employees on the job.
Wilcheck added that he never intended to commit fraud and fully intended to repay the banks.
“In hindsight, I should have walked away,” Wilcheck said Monday.