The former chief financial officer of Waukesha-based Palmer Company will plead guilty to lying to American Bank about the company’s debts to secure a loan.
Wendy Maus faces 30 years in prison on each of two counts, but prosecutors will recommend no more than 24 months incarceration, according to a plea agreement filed Wednesday in the U.S. District Court for Eastern Wisconsin.
The plea agreement also says Maus will pay nearly $860,000 in restitution to American Bank.
Palmer Company, a distributor of industrial cleaning supplies and equipment, previously had financing with First Business Bank but Investors Bank, now known as American Bank, purchased the loans in January 2012. The loans included a $1.5 million line of credit and $660,000 mortgage on the company’s building, according to the plea agreement.
The plea agreement says Maus did not disclose the company’s growing debt to the IRS in financial documents filed with the bank between late 2011 and March 2013. She initially indicated the company had no federal and payroll tax liabilities when it actually owed $419,000. By March 2013, the debt had grown to more than $650,000, but Maus listed it as $20,895.76.
The debt was the result of withholding the proper deductions from employee payroll but not paying the IRS, according to the plea agreement.
Maus also overstated the cash surrender value of an asset life insurance policy the company had in the financial documents.
The plea agreement says American Bank personnel would testify that they wouldn’t have approved the loans had they known Maus was providing false information. By July 2013 Palmer Company was out of business and the bank realized it was out $2.1 million. After trying to recoup the money by collecting on various assets, the company eventually charged off $859,699.83 in losses.