The owner and president of a US company that provided financing to companies buying heavy equipment has been jailed for two years and five months for his part in a US$1.7 million letter of credit (L/C) fraud.

William Leckey, from New York state's second city of Buffalo, must also serve three years of supervised release for his fraudulent activities.

Equipment financing

The court heard that for around ten years until 2012, Leckey ran Anchor Capital Services (ACS), which provided customers with finance for equipment such as tractors, trailers and dumper trucks.

The company made money by applying high interest rates to loans made to its customers while borrowing its own funds at lower interest rates through credit lines it had with several financial institutions using the equipment it leased as collateral.

False documents

But Leckey obtained funds based on fraudulent leases that were in fact non-existent.

Using these fraudulent documents, ACS obtained amounts in excess of US$100,000 from several financial institutions.

Guilty plea

Leckey's company eventually received more than US$1.7 million on its L/Cs from these institutions.

The businessman, who said that he engaged in fraud to try and save his now bankrupt company, pleaded guilty in August 2013 to one count of conspiracy to commit bank fraud.

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