Peter G. Johnson (former president, chairman and CEO) , Peter B. Johnson (G. Johnson’s son and head of operations of European affiliate Euromar) and Thomas Reich (vp of Transmar’s finance department) were indicted on August 8 at a court in New York.
The trio is accused of conspiracy to commit bank fraud and wire fraud affecting a financial institution by misrepresenting information to secure up to $400m credit with banks.
Transmar had over 350 customers worldwide and supplied major chocolate firms, including Mars, Hershey, Nestlé and Barry Callebaut.
The company filed for bankruptcy after its European affiliate Euromar Commodities GMBH became insolvent.
German cocoa processor Euromar filed for bankruptcy and suspended operations in August 2016 after taking a position on the London futures market that proved costly when the pound weakened after the UK’s Brexit vote.
Swiss commodity merchant ECOM agreed to buy Euromar Commodities GmbH's factory near Berlin earlier this year, according to Reuters, subject to regulatory approval.
Transmar Commodity Group Ltd filed for bankruptcy on December 31, 2016, owing banks around $360m at the time.
Criminal fraud case
The US criminal case alleges Johnson, Johnson and Reich “schemed to misrepresent material information about Transmar’s finances, making it appear that Transmar had far more credit-eligible collateral than it actually had”.
The indictment alleges Reich – directed by Johnson and Johnson – claimed previously sold assets and fake accounts as collateral from 2014 to November 2016.
This allegedly helped family-run cocoa commodity trading company Transmar Commodity Group Ltd. secure a credit facility of between $250m to $400m.
The three men have been released on bail. They face up to 30 years in prison for each count.
Shalom D. Stone, a lawyer at Stone Conroy LLC and counsel for one defendant told this site: "Mr. Peter B. Johnson has done nothing improper or illegal. He looks forward to his day in court. He is confident that he will be exonerated."
ConfectioneryNews has contacted lawyers for the other defendants for comment and is awaiting a response.
United States of America v Peter G. Johnson, Peter B. Johnson and Thomas Reich
US District Court, Southern District of New York
Case No. 17-cr-00482.