Former Monon Corp. execs convicted of fraud

Nov 22, 2002 12:00 PM

A federal court jury has found two executives of the former Monon Corp. guilty of conspiracy, wire fraud and mail fraud, according to the Lafayette (Ind.) Journal and Courier.

Former CEO Thomas J. Rosby, 58, was convicted along with former executive vice president/CFO John M. Franklin, 47, after the jury deliberated 10 hours.

Rosby and Franklin could face up to five years in prison and fines up to $250,000 on each conviction when they are sentenced Feb. 12 by Judge James Moody of U.S. District Court.

Monon was forced into bankruptcy and closed in October 1996, displacing about 1,000 workers. The plant reopened under new ownership as HPA Monon Inc, then closed again last May.

The jury determined that Rosby and Franklin directed the fraudulent borrowing of millions of dollars in 1996 as they struggled to keep the struggling trailer manufacturer in operation.

Rosby and Franklin were accused of defrauding three lending institutions: Congress Financial Corp., A.I. Credit Corp. and Anthem Premium Finance.

The newspaper said Congress Financial contracted to make daily loans to Monon based on the number of trailers the company had built the day before. But instead of submitting numbers to Congress Financial for the previous day’s production, Monon would report the number of trailers it expected to build the day of the report.

As a result, according to testimony, Congress Financial lost about $5 million, a debt that was assumed by HPA Monon after the bankruptcy but has yet to be paid.