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Company President Sentenced in "Float" Scheme
Edwin H. Lund, formerly a resident of Erie, Pennsylvania, was sentenced on
October 22, 2001, to 51 months imprisonment and ordered to make approximately
$3.1 million in restitution. Lund pleaded guilty to charges of bank fraud and
filing false statements with the IRS.
Lund, president of Presque Isle Group Companies, Inc. (PIGC), d/b/a Lund
Accounting and Payroll Systems, of Erie, Pennsylvania, employed a scheme to
defraud National City Bank. A detailed "float" scheme where Lund, on behalf of
PIGC, requested wire transfers to be credited to his business account knowing
that the transactions would ultimately be rejected for a number of reasons
including: insufficient funds, fictitious account numbers, requests applied to
closed accounts, and unauthorized wire transfer request. In the one, two, or
three day period that it would take National City Bank to discover and reject
the transfer request as improper, Lund, again using his business account, would
initiate additional wire transfers to cover the discrepancies in the account
balance. The National City Bank lost over $2.9 million from this scheme.
Lund also filed false and fraudulent statements with the IRS. In the course
of his duties at PIGC, Lund supervised payroll processing and was responsible
for withholding federal, state, and local taxes from his clients’ payroll checks
and remitting those funds to taxing authorities. Lund admitted that he filed
false tax forms with the IRS indicating that he had paid his client’s required
taxes when in fact he had not.
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