MISSOULA — The former CEO of a now-defunct Montana appliance and electronics chain has been sentenced to just over five years in federal prison for defrauding the employee-owned store founded by his father-in-law, leading it to file for bankruptcy.
U.S. District Judge Dana Christensen sentenced George Manlove on Friday, the Missoulian reported.
Manlove was found guilty in February of conspiracy and 172 fraud charges over his actions at Vann’s Inc. Prosecutors alleged he spent company money on personal expenses without the approval of the board of directors. The charges also alleged he and former chief financial officer Paul Nisbet conspired to create holding companies to buy buildings and lease them to Vann’s at above-market rates to pay off the loans and gain ownership of the buildings.
“I personally am devastated that Vann’s failed on my watch,” he said during the six-hour sentencing hearing. “Trust me, I feel everyone’s pain.”
But Manlove said he never felt like he defrauded the company. He asked the judge for leniency, saying he felt he could still contribute to society.
The judge said Manlove has avoided taking any blame for the company’s failure, including saying that Nisbet was the primary person involved in the fraud.
“The 12 jurors were not convinced, and neither am I,” Christensen said. “You blame everyone else, the economy, whatever, for what went wrong. This is a level of hubris, some would say arrogance, that defies explanation.”
Among the personal expenses charged to the company was nearly $100,000 in tuition and other costs — including a class ring — so Manlove could get his master’s degree in business administration, court records said.
After finding Manlove guilty, jurors ruled he should forfeit $2.4 million.
Manlove was ordered to report to prison on June 20, a day after his restitution hearing.
Nisbet pleaded guilty to conspiracy and was sentenced in October to 14 months in prison. He was released earlier this year after the judge reduced his sentence because of his cooperation with Manlove’s prosecution.
The employee-owners of Vann’s filed a civil lawsuit alleging actions by Manlove and Nisbet led to the bankruptcy that made their $9.2 million in stock worthless. The employee-stockowners received $7.3 million of a $15.3 million settlement paid by business insurance policies.
Pete Vann founded the company in 1961, and it grew to have locations in several Montana cities. Vann’s Inc. filed for bankruptcy in 2011.