Newsroom - February 2008
In October, 2001, a bank client entered into an agreement with an Atlanta based entity known as S&W International Foods Specialties, Inc. (“S&W”) establishing a $6 million revolving line of credit. Our client hired Parker Hudson to collect on the loan. It became readily apparent that S&W, acting through its president and primary shareholder, Jason Slaughter, had perpetrated a substantial fraud on the bank by significantly overstating its accounts receivable and inventory.
Despite our client's certainty that a fraud had been perpetrated, proving the fraud and the participation of the principal was considerably difficult, particularly in light of the fact that the company maintained two sets of financial records – one that recorded actual results of operations and the other which was provided to the bank – and the accounting personnel at the company collaborated with Slaughter to cover up the fraud.
After more than 5 1/2 years of investigation, numerous depositions and witness interviews, lawsuits against Slaughter and his wife on their guaranties, and two bankruptcy proceedings filed by S&W and Jason Slaughter and his wife, we persuaded the U.S. Attorney to seek a criminal indictment against Slaughter. The trial was held in the early part of this year, and Mr. Slaughter was convicted on all 37 counts of bank fraud. Mr. Slaughter has been sentenced to 10 years in prison and will be on probation for five additional years on each count (in other words, for the rest of his life). Ed Dobbs led the Parker Hudson team, which included Jay Rankin and Ty Morrison.