Hanover business owner's scam sends him to federal prison
The owner of a Hanover vacuum cleaner sales business must serve time in federal prison for using customer information to scam a bank out of about $150,000.
Matthew S. Norris, 34, was sentenced Tuesday to three years in federal prison and ordered to pay $148,852 in restitution, according to a news release from Dawn Mayko, spokeswoman for the U.S. Attorney's Office.
He pleaded guilty in December to bank fraud and money-laundering charges.
In 2011, Norris came up with a bank-fraud scheme to defraud GE Capital Retail Bank. He was the owner and operator of Aerus Electrolux, an independent franchisee of Electrolux International, on York Street in Hanover, according to the release.
Norris submitted credit applications to GE Bank under the names of 25 of his customers without their knowledge or approval, court documents state.
He inflated their incomes on the applications and obtained lines of credit for those customers to "buy" Electrolux products. Norris would then charge the accounts for merchandise that was never actually sold, officials said.
GE Bank deposited the proceeds of the loans into Norris' business account, officials said. The bank is changing its name to Synchrony Bank.
Norris made the monthly credit-card payments on the unauthorized lines of credit, using proceeds from his scam, officials said.
The bills were sent to him because he used his business address as the customers' home addresses, according to the news release.
An executive with Aerus Electrolux uncovered the scheme in October 2011 after becoming suspicious of the "unusual sales transactions" and ordering an audit, the release states.
GE Bank credited all the accounts after learning of the scam, officials said.
Norris must report to prison July 26, according to his sentencing order.
Norris' total restitution amount was $157,785, but that figure was reduced to $148,852 because he has already paid nearly $9,000 of it, according to Assistant U.S. Attorney Kim Douglas Daniel, who prosecuted the case.
Norris' federal public defender, Heidi Freese, did not return a phone message seeking comment.
Her sentencing memorandum on Norris' behalf states he was born and raised in Hanover and is married with five children.
Freese wrote that the scam was out of character for Norris, who she said has "strong family values."
Before getting married, he studied youth ministry at Southwestern Assemblies of God University in Texas, according to the memorandum.
— Reach Liz Evans Scolforo at email@example.com or on Twitter at @LizScolforoYD.