The U.S. Attorney for the Eastern District of New York said Rodney Watts, former chief investment officer of holding company GDC Acquisitions, was sentenced in federal court to 37 months in prison to be followed by 5 years of supervised release.

As part of the sentence, Watts was ordered to pay more than $15 million in restitution and $18 million in forfeiture. In May 2013, Watts was convicted by a federal jury on charges of bank, mail and wire fraud, conspiracy to commit bank, mail and wire fraud, and false statements. The charges arose out of the defendant’s scheme to defraud Amalgamated Bank, GDC’s asset-based lender, of $21 million in fraudulent loans.

Watts helped orchestrate a scheme to defraud Amalgamated Bank and C3 Capital by obtaining and attempting to obtain loans on the basis of false financial statements and other material misrepresentations. He and others gave Amalgamated Bank false financial information for GDC in which they had fraudulently inflated the company’s accounts receivable to obtain credit lines totaling approximately $21 million.

Watts and his co-conspirators inflated the accounts receivable by a variety of means, including recording in the corporate books sales that had never taken place. For example, Watts represented to Amalgamated Bank in writing in November 2009 that GDC had $25.2 million in accounts receivable when it had only approximately $9 million. The scheme unraveled when one of the accountants turned himself into the FBI and cooperated in the government’s investigation.