May 20, 11

NEWS / Former CEO of Humboldt Creamery Sentenced to 30 Months in Prison for Loan Fraud

SAN FRANCISCO—Richard Ghilarducci was sentenced yesterday to 30 months in prison and ordered to pay $7 million in restitution for loan fraud, United States Attorney Melinda Haag announced.

Mr. Ghilarducci, 50, formerly of Rio Dell, California, pleaded guilty on May 5, 2010, to loan fraud, in violation of 18 U.S.C. § 1014. According to the plea agreement, from 2005 through 2008, Mr. Ghilarducci, while he was CEO of Humboldt Creamery, falsified numbers in yearly financial statements. In 2005, the creamery entered into loan agreements with CoBank. When the creamery suffered financial losses, beginning in 2005 and continuing through 2008, Mr. Ghilarducci falsified the company’s books and records to prevent lenders from learning the true financial condition of the creamery. Specifically, he inflated the value of the creamery’s accounts receivable and inventory in various financial statements prepared for and submitted to CoBank. Ultimately, Humboldt Creamery defaulted on its loan, causing a loss of between $7 to $20 million.

Humboldt Creamery was formed in 1929 and is located near the small town of Ferndale, in Humboldt County, California. According to court documents, the creamery was a private company of which 75 percent was owned by a cooperative of local dairy farmers. Many people from the local community worked for, invested in, or were affiliated with the creamery.

Mr. Ghilarducci was with the creamery for more than two decades, serving as its CFO and then CEO. Shortly after Mr. Ghilarducci’s fraud was discovered, the creamery declared bankruptcy. United States Attorney Melinda Haag stated: “The unraveling of the creamery has had a profound impact on the community. This prosecution holds Mr. Ghilarducci accountable for defrauding the bank and the damage his actions caused.”

The sentence was handed down by U.S. District Court Judge Charles R. Breyer following a guilty plea on the information charging a violation of 18 U.S.C. § 1014. Judge Breyer also sentenced the defendant to a three-year period of supervised release. The defendant will begin serving the sentence on May 20, 2011.

Jonathan Schmidt is the Assistant U.S. Attorney who is prosecuting the case with the assistance of Phillip Vilanueva, Ponly Tu, and Elizabeth Garcia. The prosecution is the result of a year-long investigation by the FBI.

Further Information:

Case #: CR 10-0056 CRB

A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.

http://sanfrancisco.fbi.gov/dojpressrel/pressrel11/sf051911a.htm

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