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TRENTON - Attorney General Anne Milgram and Criminal Justice Director Gregory A. Paw announced that five people - alleged to be itinerant white-collar con artists - have been indicted on charges they swindled an Atlantic County family out of its egg processing business to steal their accounts receivable and run the business into the ground.
According to Director Paw, the Division of Criminal Justice Major Crimes Bureau obtained a five-count state grand jury indictment on June 4 charging the following defendants with theft by deception in connection with their fraudulent purchase of Tuckahoe Enterprises, an egg processing business in Buena Vista:
- Kenneth Mitan of Farmington Hills, Michigan, aka John Hill, John Thompson, John Miller;
- Charro Pankratz of Clinton Township, Michigan;
- David Wendell of Mt. Clemens, Michigan;
- Tracy Weiss of Alabama; and
- Bruce Atherton of Louisville, Kentucky.
The theft charge is a second-degree offense. In addition, Mitan, Pankratz and Atherton are charged with first-degree conspiracy and first-degree financial facilitation. Pankratz also is charged with second-degree passing bad checks and third-degree possession of cocaine.
The charges stem from an investigation by the New Jersey State Police. Pankratz was arrested by State Police on Jan. 23 on a charge of theft by deception. She allegedly had a small amount of cocaine in her possession when she was arrested at a hotel room in Vineland. She is free on $175,000 bail. Mitan, Weiss and Wendell have been charged by authorities in Missouri in connection with a similar fraudulent scheme. Mitan and Wendell remain in jail there in lieu of $500,000 bail. Weiss is free on bail.
In 2007, the defendants arranged to purchase Tuckahoe Enterprises, which was being sold by the family that had owned and operated it for 40 years. Mitan, under the alias John Hill, and Wendell pretended to represent a Los Angeles investment group interested in buying the business as a going concern. They agreed to purchase it for $1,325,000 plus the cost of its inventory. The $1,325,000 was to be paid with a $795,000 down payment at closing - $600,000 of which was to pay off a secured bank loan taken out by the sellers - and a $530,000 promissory note to be paid to the sellers in monthly installments.
At closing on Nov. 19, 2007, the family learned that the actual purchaser would be Pankratz, who was presented as an entrepreneur who already ran similar businesses. She purportedly was going to continue to employ two members of the family, the father and a son.
Although all of the documents were signed transferring ownership, Mitan and Pankratz refused to make the cash payment at closing on the pretext that an escrow agreement had not been finalized for the shares of the company’s stock. Nonetheless, Mitan, Pankratz and Weiss showed up at Tuckahoe’s plant the next day and took control. Within a couple of months, Tuckahoe Enterprises was drained of funds and was more than $1.9 million in debt to seven vendors.
It is alleged that the defendants, in reality, had no intention of running the business. They are charged with fraudulently obtaining control of Tuckahoe to steal its accounts receivable. The defendants allegedly diverted more than $500,000 of accounts receivable of Tuckahoe into outside accounts that they controlled, many of which were set up by Atherton.
While accounts receivable and other funds of Tuckahoe were used to pay approximately $357,000 to the sellers for their inventory and to pay $250,000 of the secured bank loan - the balance of which the bank obtained through its liens on accounts receivable - the defendants never made any payments to the sellers on the promissory note. They failed to pay nearly $200,000 due to a broker, and Pankratz allegedly wrote at least seven bad checks for a total of approximately $423,000 to vendors that supplied eggs to Tuckahoe.
First-degree crimes carry a maximum sentence of 20 years in prison and a $200,000 fine, while second-degree crimes carry a maximum sentence of 10 years in prison and a $150,000 fine. Third-degree offenses carry a maximum sentence of five years in prison and a $15,000 fine.
The indictment is merely an accusation and the defendants are presumed innocent until proven guilty.
The investigation was conducted and coordinated by Detective Charles Vincente and Trooper John Scalabrini of State Police Troop A Criminal Investigation Office, Buena Vista Station, Detective Sgt. 1st Class Paul Spirit of the State Police Financial Crimes Investigation Unit, and Deputy Attorney General Yvonne Maher of the Division of Criminal Justice Major Crimes Bureau. Deputy Attorney General Maher presented the case to the grand jury.
The indictment was handed up to Superior Court Judge Linda R. Feinberg in Mercer County, who assigned the case to Atlantic County.
View Indictment (120k PDF)
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