Steven D. Griffin, Making a False Statement to a Financial Institution, Vermont 2023

BURLINGTON, VT – A once-powerful figure in the North Country’s construction industry walked away with a lenient sentence yesterday, but not without admitting to a brazen scheme that bilked banks out of over $12 million. Steven D. Griffin, 59, of Berlin, New Hampshire, was sentenced by Chief Judge Christina Reiss to 24 months of home confinement, part of a five-year term of supervised release, for making a false statement to a financial institution. The court also ordered Griffin to pay $500,000 in restitution – a paltry sum considering the scale of the deception.

Griffin, former CFO and part owner of Isaacson Structural Steel, Inc. (ISSI), admitted to inflating the company’s assets – including a massive overstatement of inventory – to secure loans from Passumpsic Savings Bank and other lenders. A $2 million portion of those loans was guaranteed by the Small Business Administration back in late 2010. ISSI, before its spectacular collapse, fabricated steel for commercial construction projects, handling both material supply *and* erection. The company’s fraudulent practices propped up a failing business, allowing it to continue operating while racking up debt it could never repay.

Court records reveal a systematic pattern of deceit stretching from August 2007 to April 2011. ISSI officers routinely submitted fabricated borrowing base certificates and financial statements, inflating assets by a million dollars – or more – at a time. One particularly egregious example involved a Boston construction project at 303 Third St., where ISSI falsely claimed a higher amount owed for completed work. But the real bombshell came in early 2011, when ISSI’s draft financial statement for 2010 listed inventory at approximately $12 million. The *actual* value? Less than $2 million – an inflation of over $10 million. When the banks finally caught on in April 2011, the house of cards began to tumble.

By June 2011, ISSI was bankrupt, its assets liquidated, and banks were left holding the bag. Griffin attempted to argue for a lighter sentence, citing community service and “severe physical illnesses.” Chief Judge Reiss acknowledged his health concerns, opting for home confinement over a potential prison term ranging from 51 to 63 months. While Griffin avoids jail, the lengthy home confinement serves as a restriction on his freedom, a compromise the judge deemed appropriate given the circumstances.

This case isn’t closed yet. Arnold Hanson, ISSI’s CEO, previously pleaded guilty to conspiring to submit false financial statements and is scheduled to be sentenced on November 23, 2016. Assistant U.S. Attorneys Paul Van de Graaf and Timothy Doherty are prosecuting the case. Hanson is represented by George Ostler, Esq. The ongoing investigation is being conducted by the FBI, the FDIC’s Office of Inspector General, and the SBA’s Office of Inspector General, suggesting more heads could roll in this tangled web of financial misconduct.

The fallout from ISSI’s fraud underscores the vulnerability of the financial system to calculated deception. While Griffin may be enjoying a semblance of freedom, the banks – and ultimately, taxpayers – are the ones paying the price for his and his colleagues’ greed. This case serves as a stark reminder that even in the seemingly stable world of construction and finance, fraud lurks beneath the surface, ready to crumble empires and leave devastation in its wake.

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