NEW YORK (Reuters) - Three former executives at Transmar Commodity Group Ltd on Friday pleaded not guilty to defrauding banks to win a $400 million credit line for the now-bankrupt New Jersey-based cocoa trading company.
Peter G. Johnson, who was Transmar’s chief executive; his son Peter B. Johnson, who oversaw Transmar’s Euromar Commodities affiliate; and Thomas Reich, former finance vice president, entered their pleas before U.S. District Judge Jed Rakoff in Manhattan.
Rakoff set an April 10 trial date.
Transmar, a Morristown, New Jersey-based unit of Transmar Group Ltd, had sold cocoa products to chocolate makers such as Hershey Co (HSY.N) and Nestle SA (NESN.S) prior to filing for Chapter 11 bankruptcy protection last Dec. 31. The bankruptcy case was converted to a Chapter 7 liquidation on July 26.
The three defendants were charged earlier this week. Prosecutors accused them of “lying repeatedly” to banks from 2014 to December 2016, inflating the amount of collateral the company had to support its borrowing.
Transmar owed the banks roughly $360 million at the time of the bankruptcy, prosecutors said, and each defendant faces up to 30 years in prison on each count.
The criminal case is U.S. v. Johnson et al, U.S. District Court, Southern District of New York, No. 17-cr-00482. The bankruptcy case is In re: Transmar Commodity Group Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 16-13625.
Reporting By Brendan Pierson in New York; Editing by Dan Grebler