MISSOULA — The former CEO of a Montana appliance and electronics store has been indicted on federal charges alleging he defrauded the employee-owned company his father-in-law founded, forcing it into bankruptcy in August 2012.
George Leslie Manlove pleaded not guilty in U.S. District Court in Missoula on Tuesday to 221 federal charges, including conspiracy, 124 counts of wire fraud, 86 counts of money laundering, four counts of bankruptcy fraud, two counts of bank fraud and four counts of making false statements to banks. He was released on his own recognizance. A trial date has not been set.
The indictment alleges Manlove and unindicted co-conspirator Paul Nisbet defrauded Vann’s Inc., its employee-shareholders, lenders and the company’s bankruptcy estate.
“It was part of the conspiracy that the conspirators used their official positions within the company to obtain loans using Vann’s assets as collateral and spend corporate assets for their own personal benefit,” the indictment said.
Prosecutors alleged Manlove and others created shell companies, borrowed money to purchase buildings that housed Vann’s stores then directed Vann’s to make lease payments to the shell companies in order to gain ownership of the property.
Despite knowing that Vann’s was in financial peril and faced bankruptcy, Manlove and Nesbit continued to cause Vann’s to make lease payments to their shell companies on the two store buildings owned by their LLCs, even though the stores had gone out of business, prosecutors allege.
Charging documents also allege Manlove had Vann’s pay thousands of dollars in personal expenses, including over $57,000 tuition and other costs to pay for his Masters of Business Administration Degree, thousands of dollars for travel and more than $70,000 for membership fees and dues to a golf and recreational club near Deer Lodge.
A group of former employees filed a civil lawsuit against Manlove and Nisbet, who was the company’s chief financial officer, alleging their financial indiscretions forced the company into bankruptcy, making their $9.2 million worth of stock worthless. The lawsuit was settled for $7.3 million in 2014.
Vann’s was founded in Missoula in 1961 by Pete Vann.