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Debt-collection executive Wolfe to plead guilty to fraud charges

January 30, 2017

Todd Wolfe, who was indicted on federal fraud charges in 2015 following the collapse of Fishers collection agency Deca Financial Services LLC, has agreed to plead guilty to two of the four charges against him.

Wolfe has agreed to plead guilty to one count of bank fraud and one count of bankruptcy fraud, according to documents filed last week in U.S. District Court in Indianapolis. 

In exchange, prosecutors will dismiss two counts of wire fraud. But Wolfe has agreed to pay $1 million restitution to the victim of those two counts, as well as restitution in an amount to be determined at sentencing.

The bank-fraud charge carries a maximum sentence of 30 years in prison, a $1 million fine and five years of supervised release. Bankruptcy fraud carries a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release. 

The parties have not agreed on a specific sentence—that will be up to the court. A sentencing date has not been set.

All of the charges against Wolfe are related to Deca Financial, which Wolfe founded in 2009. The company, which at one time employed about 75 people, collected delinquent loans for health care, student loans and financial services.

For a time, Deca appeared to thrive. In 2012, the Indiana Economic Development Corp. offered Deca $2.5 million in tax credits based on the company’s promise to create 270 jobs by 2015.

But Deca’s creditors forced it into bankruptcy in 2014, saying the company owed key vendors $935,000. 

Following a joint investigation by the U.S. Bankruptcy Trustee and the FBI, Wolfe was indicted on federal charges.

The bank-fraud charge concerns a line of credit that Deca obtained from BMO Harris Bank. BMO Harris originally approved Deca for a $1 million line of credit in 2010. Wolfe presented the bank with fraudulent financial information in order to secure increases in that line of credit, which by 2013 stood at $7.5 million, court filings say. 

The bankruptcy fraud charge relates to information Wolfe presented during bankruptcy proceedings in 2014. Wolfe falsely claimed he had a living trust worth $14.5 million that would be available to repay creditors, according to court records.

The two wire fraud charges relate to an agreement Wolfe signed with an investor in June 2013. The investor, identified in court documents only as Victim #1, sent Wolfe $1 million in two separate wire transfers to purchase 5 percent of Deca’s stock. Wolfe put that money in his personal account and the investor never received the stock, the indictment says.

Wolfe is represented by John L. Tompkins of the Indianapolis law firm Brown Tompkins Lory & Mastrian.

IBJ was unable to reach either Tompkins or federal prosecutor Winfield D. Ong Monday morning.

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