Judge issues no prison time in $1.7M fraud case


A federal judge on Thursday gave no prison time and told, “Godspeed” to a North Carolina man convicted by a jury of four counts related to defrauding a local bank and the U.S. Small Business Association out of $1.7 million.

Prosecutors, who had hoped for a sentence of 30 months, objected to the ruling.

Paul David Musgrave, 57, of Waxhaw, N.C., was ordered by U.S. District Judge Timothy S. Black to pay $1.7 million in restitution and to serve three years’ supervised release, perform 100 hours of community service and pay fines totalling $400.

Musgrave could have faced up to 30 years in prison, a $1 million fine, and five years of supervised release on each count. Federal advisory sentence guidelines — which the judge is not bound by — pointed to a prison term of between 51 and 71 months. Musgrave’s attorney, William Terpening, asked for home detention, which the judge did not impose.

In late January and early February, Musgrave had been on trial and the jury deliberated for three days before convicting Musgrave of one count of conspiracy, two counts of wire fraud and one count of bank fraud.

Though Black said during the 2½-hour sentencing that he hadn’t seen much acceptance of responsibility from Musgrave, the judge said he “was reached” by the numerous letters of support and character witness offerings of six people out of more than 20 friends, family and associates that attended the hearing.

Among the items Black listed to explain his ruling were that Musgrave had no criminal record, didn’t receive any of the $1.7 million, lost about $300,000 of his own money, endured “four years of hell,” would likely lose his certified public accounting license, had medical issues including sleep apnea that require a machine for proper sleep, that his services were needed by Production Screw precision machining in East Dayton and that he was not likely to re-offend. Musgrave mostly works for Production Screw remotely.

According to trial testimony, Musgrave and others in November 2008 organized Dayton International Tire Recycling as a small business intending to construct and operate a tire recycling plant at 1400 Lytle Road in Troy.

Musgrave, who had lived in the Dayton area, owned 81 percent interest in the company. The rest was held by a Singapore-based corporation known as Intercontinental Trading of the British Virgin Islands.

In 2010, Musgrave applied for an SBA-backed loan for $1,715,650 from the Mutual Federal Savings Bank of Troy. In the loan application documents, he falsely certified that he would put money from his personal savings, home equity and from a home equity line of credit toward the project, according to trial testimony.


Reader Comments ...


Next Up in Crime

Stabbing victim flown to hospital; Springfield crews search for suspect
Stabbing victim flown to hospital; Springfield crews search for suspect

Springfield police are searching for a suspect after a man was stabbed in the chest, according to Springfield Sgt. Michael Curtis. Crews were dispatched to the 1100 block of Water Street around 11:40 p.m. Friday on a report of a stabbing.  Officers arrived to find the victim coherent and unable to recall the events leading up to the stabbing,...
Pennsylvania man accused of urinating on toys on store shelf
Pennsylvania man accused of urinating on toys on store shelf

A Pennsylvania man is accused of urinating on toys and other items in a store.  Police said David Pacoe, 74, was captured on surveillance video urinating on a shelf inside Playthings, Etc. in Butler on Nov. 2.  “It's not very nice at all and it's a toy store. You shouldn't have to worry about having security and guards or...
Ohio woman burned by coffee in break room spat
Ohio woman burned by coffee in break room spat

An Ohio woman suffered “significant burns” when another woman threw a cup of hot coffee on her in a break room at the YWCA, according to a Dayton Police report.  Officers and a medic were dispatched to the YWCA in Dayton at 5:25 p.m. Thursday on a report of an aggravated assault.  The two women involved in the altercation...
Louisiana veteran entertains motorists with saxophone
Louisiana veteran entertains motorists with saxophone

A Vietnam War veteran has become a fixture for music lovers in his Louisiana town. Donald Givens plays saxophone for several hours daily in his gazebo at his Monroe residence. His yard is located near the corner of two overpasses and commuters can listen to his daily jam sessions, the News-Star reported. Strangers pull up to his home and ask Givens...
Stolen Van Halen guitar returned to Hard Rock Cafe in Texas
Stolen Van Halen guitar returned to Hard Rock Cafe in Texas

A guitar owned by rock ’n’ roll legend Eddie Van Halen worth more than $100,000 was recovered Friday, hours after it was stolen from a Hard Rock Cafe in San Antonio, Texas, KSAT reported. The guitar, nicknamed “Frankenstrat,” had been reported stolen around 1 a.m. Friday. It was returned later in the day, but it is unclear how...
More Stories