In what appears to have been an elaborate scheme to defraud the government — one that ultimately ended with him and his wife, Nina, skipping town after breaking promises to deliver furniture to waiting customers — 45-year-old Rene Michael Ward admitted in federal court Feb. 3 that he submitted false documents and lied to the U.S. Small Business Administration.
Court documents indicate that Rene Ward now lives in Chantilly, Va.
He and his wife ran W. Home Furnishings in River Ranch for four years until First Bank and Trust stepped in and seized what was left in the 2,200-square-foot rental space in the summer of 2011; it was estimated at the time that local customers were owed about $30,000 in furnishings they had paid for but never received. They were both indicted on seven counts in January 2013, including conspiracy to commit mail and wire fraud, wire fraud (two counts), submitting a false document to a department or agency of the U.S. and making a false statement to the U.S. SBA (three counts).
The Wards’ financial troubles date back to their time in Covington, where they operated Villa Vici furniture store before moving to Lafayette post-Katrina.
If Rene meets the terms of his plea agreement, prosecutors will dismiss the charges against his wife.
According to evidence presented at the Feb. 3 guilty plea, the Wards submitted numerous false documents to the SBA in an attempt to have the SBA agree to their Offer in Compromise (OIC) to settle an outstanding loan of $511,400 for a $10,000 lump sum payment.
Among the lies the couple told, according to the plea, was a statement that they had liquidated assets of their Covington store when instead they had moved the inventory to Lafayette. Additionally, at the time the OIC was presented and the Wards were claiming they had exhausted all of their funds to support the debt service, the couple had two CDs at First Bank & Trust, one for $10,000 and one for $11,054. Investigators also found that the Wards lied about transferring ownership of W. Home Furnishings to Francisco Castellanos in January 2009. “The ‘transfer of ownership’ was a sham,” the plea agreement reads, “as Castellanos never owned W. Home Furnishings, never received any income from W. Home Furnishings, did not have access to the business bank accounts and never employed Rene Ward.”
The Wards created a false appraisal of the furniture in their Lafayette store (using another local businesswoman’s name to perpetuate the falsehood) and ran personal expenses through the company, according to the court document. They also lied time and again about their income, investigators found, noting that they used the business account to make monthly rental payments of $2,500 on their home and monthly payments of $1,380 on their 2006 Porsche Cayenne, which was valued at $70,000, but did not claim the income.
Nina was telling quite a different story shortly after she left Lafayette. Here is what she had to say in a Facebook response to one upset customer, ad exec Cherie Hebert, in August 2011 (according to the cover story “Warding Off” in ABiz sister publication IND Monthly): “I left Lafayette and the business well over a month ago to take a job out of state to provide for our family. We were not personally taking any money from the business, this is why I went to get a job. You have never been in my shoes and have no idea what is going on. We did not walk away, we were forced out by River Ranch and the bank on Aug. 18th, we had run out of time to remedy things. My family’s business, which by the way my name is not on nor did I control the finances, has failed and is in the process of working with banks, bookeepers [sic], lawyers and businesss [sic] brokers to follow through on all outstanding orders. We have not taken a dime from the business.”
Rene faces five years in prison and three years of supervised release for one count of filing false documents to a government agency and also faces two years in prison and one year of supervised release for one count of making false statements to the SBA. He also could be required to pay a $250,000 fine for both counts and must make restitution to all of his victims — prosecutors are still determining who was victimized and how much they are owed (Hebert says she has yet to recover the more than $1,300 she lost). He will be sentenced May 16.
The couple has promised to cooperate fully in the investigation into their case and, according to the plea agreement, must share any information they have about other crimes.
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