PHILADELPHIA, Pa. (WHTM) — A former controller of a Lancaster County oil and gas company has been sentenced to prison for participating in a $65 million bank fraud scheme that she participated in for two years, according to the U.S. Attorney’s Office of Eastern Pa.
Judith Avilez, 60, was sentenced to three years in prison with five years of supervised release and has been ordered to pay $15 million in restitution for her two-year participation in the scheme.
CEO of Worly & Obetz, Jeffrey Lyons, began defrauding Fulton Bank in 1999 by inflating the accounts receivable for their largest customer, Giant, and used the company’s controller to falsify the financial statements to get loans and extensions from Fulton Bank.
Lyons partnered with Karen Connelly, the controller before Avilez, from 2003 to 2016 before Connelly retired.
Avilez, an Elizabethtown resident, continued the scheme in 2016 until the Manheim based gas and oil company filed for bankruptcy in June 2018.
“Judith Avilez walked in on the tail end of this scheme, and she had the opportunity to report it and stop the fraud,” said Acting U.S. Attorney Jennifer Williams. “But instead of doing the right thing, she chose the greedy path. Instead of performing her job honestly, she chose to help her new boss steal tens of millions of dollars from bank lenders. And as a result, a company was destroyed and its employees were devastated. Our Office will continue to work with our law enforcement partners to protect innocent individuals and businesses from being victimized by financial fraud.”
Approximately 275 employees lost their jobs and the family-owned company closed their doors after 72 years due to the bank fraud that lasted for 19 years.
Lyons was sentenced to 14 years in prison and Connelly was sentenced to four years in prison for their roles in the bank fraud.