MARCO ISLAND — A 41-year-old Marco Island man must give up his $1.2 million waterfront home and faces up to 30 years in federal prison for bribing an insurance adjuster and bilking the insurer out of $3.2 million -- and then buying his home with dirty money.
Donald Chill of 739 Hull Court pleaded guilty Friday in U.S. District Court in Tacoma, Wash., to mail fraud involving the insurer, bank fraud for defrauding Wachovia Bank and the U.S. Small Business Administration, and money laundering for falsifying records to sell his disaster recovery company and using those ill-gotten gains to buy his home.
Under the plea deal, federal documents show, he admitted his Washington-based company, Charles Prescott Restoration, submitted inflated billings for emergency repairs for homes and businesses covered by Mutual of Enumclaw, sold his company for $4 million without disclosing the fraud, and converted that money into his waterfront home.
“I look forward to the day when white-collar criminals will realize that we in law enforcement will always be there to hold them accountable,” said IRS Special Agent Dan Wardlaw, a spokesman for IRS criminal investigations in Washington.
Chill’s attorney, Robert Chadwell of Seattle, was in court Friday afternoon and couldn’t be reached for comment by phone or e-mail. Donald and Abigail Chill have an unlisted number and couldn’t be reached.
U.S. District Judge Benjamin Settle set sentencing for Feb. 1, when Chill faces up to 20 years in prison for mail fraud, up to 30 years for bank fraud, and a maximum 10-year term for money laundering. He also faces up to three years of supervision after his release.
Under the plea agreement, Chill also faces up to $1.25 million in fines for mail and bank fraud, and a money laundering fine from $250,000 up to double the value of his home. Money laundering involves converting illegal or dirty money into funds or assets that appear to have come from legitimate or clean sources.
In addition, the plea deal requires that Chill pay restitution of roughly $3.23 million to Mutual of Enumclaw and $1.7 million to Wachovia and the SBA. Chill, who turned in his passport, is free on bond and can only travel between Florida and Washington.
The charging information and plea agreement show:
From 1995 to 2007, Chill was the owner and sole shareholder of Charles Prescott Restoration, which worked primarily for Mutual of Enumclaw in Enumclaw, Wash.
Chill’s company would respond to a damaged site, make emergency repairs and then submit a proposal for comprehensive repairs.
A special computer program authorized by the insurer included a 20 percent profit and overhead for contractors. However, as early as 2004, Chill began inflating estimates for repair work and invoices he mailed to the insurer by padding bills from subcontractors or submitting forged secondary estimates that appeared to be from competitors.
In just 10 jobs over five years that were scrutinized by investigators from the IRS and the SBA Office of Inspector General, Chill overbilled roughly $3.2 million. In one case, he submitted an $84,000 bill for nonexistent electrical repairs.
In May 2007, Chill sold his company to Matthew Smith Co. of Portland, Ore., and certified that his company books and records were true and correct. Neither Wachovia, which financed the sale, nor the SBA, which guaranteed the loan, knew of the false billing scheme and would never have approved the $1.8 million loan to purchase the business.
Collier County appraiser records show Chill and his wife, Abigail, purchased their Marco Island home for $1.785 million on Sept. 12, 2007.