Arnold Hanson Sentenced in $12M Bank Fraud

Arnold Hanson, 66, of Nashua, New Hampshire, was sentenced yesterday in federal court on charges tied to a multi-million-dollar bank fraud scheme that gutted lenders and collapsed one of northern New Hampshire’s largest steel fabricators. Chief Judge Christina Reiss ordered Hanson to serve six months under home confinement and six months under curfew as part of a three-year supervised release. He must also pay $300,000 in restitution by January 1, 2017, stemming from his role in conspiracy to make false statements to a financial institution.

Hanson, part owner and CEO of Isaacson Structural Steel, Inc. (ISSI), admitted to submitting or directing the submission of falsified asset valuations to Passumpsic Savings Bank and other lenders involved in over $12 million in loans—including a $2 million Small Business Administration-backed loan in late 2010. ISSI, based in Berlin, New Hampshire, fabricated structural steel for commercial buildings and provided erection services nationwide. The company sourced, cut, and shipped steel from its Berlin facility before imploding in June 2011 under the weight of its own deceit.

Court records reveal that from August 2007 to April 2011, ISSI executives systematically inflated asset values by at least $1 million per reporting cycle. In one glaring example, in August 2007, officers fabricated receivables tied to the 303 Third St. Boston construction project. By early 2011, ISSI’s audited financial statement claimed $12 million in inventory—over ten times the actual value, which was less than $2 million. These false borrowing base certificates and financials kept the failing company afloat with borrowed cash it never deserved.

The house of cards collapsed in April 2011 when lenders uncovered discrepancies in inventory reporting. By June, ISSI filed for bankruptcy and liquidated its assets. Banks lost millions. Steven Griffin, the company’s CFO, was sentenced weeks earlier to two years of home confinement after pleading guilty to submitting false financial statements. Prosecutors argued Griffin was more culpable than Hanson—sometimes lying directly to Hanson about the company’s financial health.

Still, Hanson avoided prison. At sentencing, he asked for leniency below the 46- to 57-month guideline range. The government backed the request, citing Hanson’s substantial cooperation in the investigation and prosecution of Griffin. Judge Reiss agreed, opting for a punitive but non-incarcerative sentence—six months confined to home, another six under curfew—preserving freedom while marking accountability.

The fallout extends beyond the company’s executives. This week, David Driscoll, ISSI’s outside accountant, settled a related civil bank fraud complaint. The DOJ alleges Driscoll knowingly prepared false audit reports that overstated ISSI’s assets while simultaneously serving on the board of Passumpsic Savings Bank—a conflict of interest that stinks of complicity. He agreed to pay a total penalty, closing the civil case but leaving a stain on the accounting profession’s integrity.

RELATED: Steel Magnate Griffin Gets Home Confinement in $12M Fraud