Written on: February 5, 2021 by ICM
PHILADELPHIA – Acting United States Attorney Jennifer Arbittier Williams announced that Judith Avilez, 60, of Elizabethtown, PA, was sentenced to three years in prison, five years of supervised release, and ordered to pay $15 million in restitution by Judge Jeffrey L. Schmehl for participating in a massive bank fraud scheme over many years.
In September 2020, Avilez, the former Controller of Worley & Obetz, pleaded guilty to her role in a scheme that defrauded Fulton Bank of over $65 million. Avilez admitted that from 2016 through May 2018, she helped Worley & Obetz’s CEO, Jeffrey Lyons, defraud Fulton Bank by creating fraudulent financial statements that grossly inflated accounts receivable for Worley & Obetz’s largest customer, Giant Food. Worley & Obetz was an oil and gas company in Manheim, PA, that provided home heating oil, gasoline, diesel, and propane to its customers.
Lyons initiated the fraud shortly after he became CEO in 1999. In order to make Worley & Obetz appear more profitable and himself appear successful as the CEO, Lyons asked the previous Worley & Obetz Controller, Karen Connelly, to falsify the company’s financial statements to make it appear to have millions more in revenue and accounts receivable than it did. Lyons and Connelly continued the fraud scheme from 2003 until 2016, when Connelly retired and Avilez became the Controller and joined the fraud. Avilez and Lyons continued the scheme in the same manner that Lyons and Connelly had. Each month, Avilez created false Worley & Obetz financial statements that Lyons presented to Fulton Bank in support of his request for additional loans or extensions on existing lines of credit. In total, Lyons, Connelly, and Avilez defrauded Fulton Bank out of $65,000,000 in loans.
After the scheme was discovered, Worley & Obetz and its related companies did not have the assets to repay the massive amount of Fulton loans Lyons had accumulated. In June 2018, Worley & Obetz declared bankruptcy and notified its approximately 275 employees that they no longer had jobs. After 72 years, the Obetz’s family-owned company closed its doors forever. The fraud Lyons committed with the help of Avilez and Connelly caused many families in the Manheim community to suffer financially and emotionally. Fulton Bank received some repayments from the bankruptcy proceedings but is still owed over $50,000,000.
Last year, for their roles in the scheme, Lyons was sentenced to 14 years in prison and Connelly was sentenced to four years in prison.
“Judith Avilez walked in on the tail end of this scheme, and she had the opportunity to report it and stop the fraud,” said Acting U.S. Attorney Williams. “But instead of doing the right thing, she chose the greedy path. Instead of performing her job honestly, she chose to help her new boss steal tens of millions of dollars from bank lenders. And as a result, a company was destroyed and its employees were devastated. Our Office will continue to work with our law enforcement partners to protect innocent individuals and businesses from being victimized by financial fraud.”
The case was investigated by the Federal Bureau of Investigation, IRS Criminal Investigations, and Northern Lancaster County Regional Police Department and is being prosecuted by Assistant United States Attorney Tiwana Wright.
U.S. District Attorney’s Office, Eastern District of Pennsylvania