By ILDEFONSO ORTIZ
The Brownsville Herald
A former Harlingen man was sentenced to seven years in federal prison for his role in a multimillion-dollar bank and bankruptcy fraud, court records show.
Mitchell Kent Sweezy, 59, former CEO of Sweezy Construction Inc., was sentenced Monday to seven years in prison and ordered by U.S. District Judge Andrew Hanen to pay $40 million in restitution.
SCI was a San Benito-based construction company that failed in 2001 and its bonded projects were taken over by AIG. Various lawsuits were filed against SCI and Sweezy which resulted in civil judgments of more than $30 million, according to a press release from the U.S. Attorney’s Office.
In addition, Hannen ruled against two business entities which were also named as defendants in the case. They are KPS Texas Development Inc. and Santorini RE Investments LTD, and their sentences involve probation.
According to the press release, Sweezy and his former chief financial officer, Claude McMillon, engaged in a scheme to obtain bank loans from federally insured banks as well as construction performance and payment bonds from AIG for construction projects using false financial statements of Sweezy Construction Inc.
McMillon pleaded guilty in 2008 and is scheduled to be sentenced later this week.
According to the press release, Sweezy admitted to setting up a multilayered trust structure in 1999 and transferred assets to the trust structure. The bulk of the transfers were placed in the name of Santorini RE, which was controlled by Sweezy, according to authorities.
After filing for bankruptcy, Sweezy failed to disclose various assets and mineral rights, which the judge said would be used to pay restitution, the release stated.