Garbage hauler receives 3 years in swindling case Businessman also must pay $224,000

February 22, 1997|By Scott Higham | Scott Higham,SUN STAFF

An Eastern Shore garbage hauler who swindled a string of banks and lending institutions out of nearly $3 million to keep his struggling company afloat was sentenced yesterday in federal court in Baltimore to three years and five months in prison without parole.

David James Duffy, 55, also was ordered to pay $224,000 to the eight banks and two lending institutions and to serve three years of probation after he is released from federal prison.

In a short, tearful plea, Duffy said yesterday that he was sorry for what he had done.

"I've had a chance to think about this every day, maybe every hour of every day," he said.

"It's a tragedy for a lot of people," U.S. district Judge Catherine C. Blake replied.

For years, Duffy and his Denton-based company prospered.

DRJ Refuse Inc. held several hauling contracts with Perdue Chicken, Westinghouse and other big companies on the Eastern Shore, making close to $3 million a year, according to court records filed by Barbara S. Sale, assistant U.S. attorney.

But a 1990 fire devastated the company's headquarters, and Duffy's insurance policy did not cover the damage.

According to court records, Duffy concocted a scheme to help keep his company alive.

He used another company, A&D Leasing, which he had formed with a partner, to obtain lines of credit and loans for trash-hauling compactors he claimed he had leased but never had.

Court records show that he fabricated leases, purchase orders and other documents, keeping his partner and his accountant in the dark.

Most of the nearly $3 million Duffy siphoned from the banks and lending institutions was used to make payments on loans he took out to keep DRJ Refuse in business, the court records show.

By February 1995, Duffy was unable to keep up his loan payments and the scheme started to unravel.

He confessed to the FBI and pleaded guilty to bank fraud charges on Dec. 12, 1996.

Pub Date: 2/22/97

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