James R. Faro, 61, of Dover, and John J. Crowley, 62, of Boca Raton, Fla., have admitted their roles in a calculated bank fraud conspiracy that unraveled a multimillion-dollar seafood distribution company. The former owner and president of Sea Star Seafood Corporation and its chief financial officer pleaded guilty today in federal court in Worcester, Massachusetts, to conspiring to defraud a financial institution by falsifying asset reports.
Faro and Crowley exploited a revolving line of credit agreement between Sea Star Seafood Corporation and a bank, which allowed the company to borrow up to $6 million secured by its inventory and accounts receivable. From October 2010 to August 2012, the duo systematically overstated the value of Sea Star’s outstanding receivables, inflating collateral to access funds far beyond what their actual assets justified.
Between November 2010 and August 2012, Faro and Crowley submitted false documentation to the lender, fabricating receivables to maintain and increase their borrowing power. Their scheme inflated Sea Star’s reported assets by more than $3 million—money that flowed through the company before the fraud collapsed under its own weight.
In August 2012, Sea Star abruptly informed the bank of a “discrepancy” exceeding $3 million between reported and real assets. Within days, the company ceased all operations, leaving creditors and employees in the wreckage. The sudden shutdown followed years of deliberate deception that prosecutors say was orchestrated at the highest levels of the business.
The charge of conspiracy to commit bank fraud carries a maximum penalty of 30 years in prison, five years of supervised release, and a fine of up to $1 million. U.S. District Court Judge Timothy S. Hillman has scheduled Faro’s sentencing for June 8, 2018, and Crowley’s for June 13, 2018. Sentences will be determined based on federal guidelines and statutory factors.
United States Attorney Andrew E. Lelling and Harold H. Shaw, Special Agent in Charge of the FBI’s Boston Field Division, announced the guilty pleas. Assistant U.S. Attorney Greg A. Friedholm of Lelling’s Worcester Branch Office is prosecuting the case. No plea deals were disclosed, and both defendants now await judgment for their role in one of central Massachusetts’ most brazen financial frauds in recent years.
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Key Facts
- State: Massachusetts
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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