MISSOULA – The former CEO of Vann’s Inc. has been found guilty of conspiracy and 172 fraud charges alleging his actions helped drive the electronics and appliance store founded by his father-in-law into bankruptcy.
Jurors returned their verdict against George Leslie Manlove on Friday evening after a two-week trial. The same jury ruled Saturday that Manlove has to forfeit $2.4 million, according to court records.
Prosecutors alleged Manlove spent company money on personal expenses — including vacations, membership fees and $200,000 to get his master’s degree in business administration — without the approval of the board of directors.
The charges also said Manlove and former CFO Paul Lyn Nisbet conspired to create holding companies to buy buildings that would house Vann’s stores, then leased them to Vann’s at above-market rates to pay off the loans and gain ownership of the buildings.
After the company filed for bankruptcy in 2012, Manlove filed a $2.4 million claim for unpaid rent even though a written lease did not exist, prosecutors argued.
When asked about the rent payments, Manlove testified last week that “nobody asked for it back.”
Under questioning from his attorney, Michael Sherwood, Manlove said it was “impossible” that he intended to defraud the company, the Missoulian reported. Sherwood also asked if Manlove had used a company credit card to pay for his class ring after receiving his MBA.
“I may have used the wrong credit card,” Manlove said.
Manlove was convicted of conspiracy, 75 counts of wire fraud, four counts of bankruptcy fraud, 87 counts of money laundering, two counts of making false statements to a bank and one count of bank fraud. He was acquitted on 41 counts including three counts of tax fraud, the Missoulian reported.
He was allowed to remain free pending his sentencing on May 19, but he must surrender his passport, cannot open any new lines of credit and cannot sell or transfer any of his assets.
The employee-owners of Vann’s filed a civil lawsuit against Manlove and Nisbet that argued their actions led to the bankruptcy that made their $9.2 million in stock worthless. The lawsuit was settled for $7.3 million paid by business insurance policies. The bankruptcy estate received an additional $3 million, and attorneys received about the same.
Nisbet pleaded guilty to a conspiracy charge and was sentenced in October to 14 months in prison. He also admitted to a forfeiture allegation that required him to give up $122,250.
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