HOUSTON – Two men have been ordered to federal prison following their convictions for conspiracy to commit wire fraud involving a fraudulent invoice scheme, announced U.S. Attorney Ryan K. Patrick.
Larry Allen Page, 67, of Katy, and John A. Elsner, 53, formerly of Houston and now of Washington State, pleaded guilty Dec. 11, 2018, and Jan. 7, 2019, respectively.
Today, U.S. District Judge Nancy F. Atlas ordered Page to serve 15 months in federal prison and pay $5,467,532.54 in restitution to his victims. Two days prior, Elsner was sentenced to 51 months in prison and $5,579,532.54 in restitution. Both men will also be required to serve one and three years of supervised release, respectively, following their release from prison.
At Elsner’s hearing, the court heard that the scheme spanned four years and the amount in false invoices grew each year of the scheme. Judge Atlas noted that the length of and repetitive nature of the criminal conduct was a factor in the decision of how long to send each to prison.
Elsner and Page defrauded a business lender of more than $4 million and two investors of $1.5 million. Elsner ran the day-to-day operations of Logistical Solutions International Inc. (LSI) as general manager and president. Page was the vice president of Finance. Elsner was also a majority shareholder in LSI.
LSI provided corporations with logistical support and training services that facilitated the stay of international visitors on assignment to train, attend meetings and work outside their home country. LSI provided these services to the oil and gas industry in the Middle East. LSI financed their operations primarily through the factoring of the LSI’s invoices to their customers.
Elsner, on behalf of LSI, entered into a factoring agreement with a lending entity to purchase LSI’s accounts receivable at a discount. During the scheme, Page and Elsner knowingly sold falsified LSI invoices to the lender under the false pretense that LSI had completed the work described in the invoice and the invoice was a final invoice ready to be submitted to LSI’s customer. At the time the scheme to defraud collapsed, LSI’s debt to the factoring company for unpaid false invoices was $4,037,532.54.
Both Page and Elsner were allowed to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.
IRS - Criminal Investigation and the Secret Service conducted the investigation. in Houston. Assistant U.S. Attorney Melissa Annis is prosecuting the case.