LANCASTER, Pa. (WHTM) – The former CEO and two former employees of a now-defunct home energy business have been charged by federal prosecutors with defrauding Fulton Bank.
Jeffrey Lyons, 58, of Lancaster; Karen Connelly, 65, of Manheim; and Judith Avilez, 58, of Elizabethtown, are all charged with bank fraud, U.S. Attorney William McSwain announced.
Lyons is the former CEO of Worley & Obetz. Connelly and Avilez were employed as controllers for the Manheim-based home heating oil, gas, and propane company that abruptly shut down in 2018.
The charging documents filed in the U.S. District Court of Eastern Pennsylvania allege that between 2003 and May 2018, Lyons, Connelly and Avilez, defrauded Fulton Bank by fraudulently inflating Worley & Obetz’s revenue on its financial statements.
To perpetuate the fraud, Connelly and Avilez allegedly created fraudulent financial statements to make Worley & Obetz appear to the bank that it had more revenue and accounts receivable than it did.
After Connelly retired in December 2015, prosecutors say she and Lyons continued the fraud for approximately six months until Lyons asked Connelly to teach the scheme to the company’s new controller, Avilez, who knowingly continued the fraud with Lyons.
Fulton Bank relied on the fraudulent financial statements when it lent Worley & Obetz over $60 million.
Lyons is additionally charged with tax evasion for not reporting over $650,000 in income he received from Worley & Obetz in 2013.
Lyons and Connelly are awaiting trial on state charges they misused more than $1 million in company funds over several years.
The Lancaster County district attorney’s office said Lyons used company funds for trips and plane fare, online shopping purchases, gym memberships, home projects, spa services, dining costs, college costs for a relative, and other personal debts.
Connelly authorized most of the payments and had an inflated salary that was authorized by Lyons, investigators said.