Former Worley & Obetz CEO Jeffrey Lyons, was sentenced in the United States District Court for the Eastern District of Pennsylvania to 14 years in prison and ordered to pay restitution of more than $53 million.
The Penn Township, Lancaster County-based energy company shut down two years ago after Lyons was arrested for defrauding Fulton Back of over $65 million between 2003 and 2018.
Lyons pleaded guilty in October to one count of defrauding Lancaster-based Fulton Bank of over $65 million and one count of tax evasion.
The fraud resulted in the closure of Worley & Obetz last June and put 255 people out of work.
Lyons later admitted that he, along with controllers Karen Connelly and Judith Avilez, provided the bank with dozens of fraudulent financial statements over 15 years that gave the illusion that the company had $55 million in accounts receivable through a series of fuel sales with Giant Food that never happened.
Lyons would go on to use the Fulton loans to pay Worley & Obetz expenses, interest on earlier loans from Fulton and personal expenses, according to a statement from United States Attorney William McSwain.
In that time, Lyons also failed to report more than $1.4 million in income to the IRS.
The U.S. Attorney’s Office announced Lyons’ sentencing on Wednesday, adding that he has been sentenced to pay restitutions of $53 million to Fulton and $550,000 to the IRS along with his 14-year prison sentence.
“The scope and duration of the fraud committed by Lyons is simply stunning,” said McSwain. “He stole tens of millions of dollars from bank lenders, all while willfully ignoring his fiduciary duty to the company and the hundreds of people who made their livelihoods working there. This case is a tragedy for the many honest, hardworking people who placed their trust in Lyons.”
In the two years since Worley & Obetz was abruptly shut down, most of the company’s stock has been sold to competing energy companies.
Seth Obetz, who owned the company with his father Robert, has since gone on to form Seth Energy, a division of York-based Shipley Energy, with 11 former Worley & Obetz employees.