Willis D. “Bill” Lonn Jr. of Aberdeen was sentenced Monday to three years in prison and three years of supervised release for 13 federal felonies related to the theft of $1.3 million from the Hoquiam family wood shaving business he managed for years, according to a release by the U.S. Department of Justice.
The sentence came down in U.S. District Court in Tacoma. Lott was convicted in October of last year of nine counts of mail fraud, two counts of income tax evasion, one count of money laundering conspiracy and one count of interstate transportation of stolen property following a six-day trial. At the sentencing hearing, U.S. District Court Judge Benjamin H. Settle said Lonn “profoundly abused the trust of his employer (and) callously betrayed family members and took what belonged to the company.”
According to records filed in the case and testimony at trial, Lon,68, managed the Long Beach Shavings Company, which was owned by his uncle and cousin and was based in California. Their Hoquiam plant processed wood shavings for use on farms, and in horse shows and pet stores. Lonn had worked there for about 10 years when he devised a plan in the 2000s to sell the shavings directly to customers in Washington and Oregon without turning the proceeds over to the company.
According to the Dept. of Justice release, later in the scheme Lonn arranged to get wood chips for free from a Montesano lumber mill, identified in court documents as Mary’s River Lumber, but informed the parent company that an entity named M & R Lumber needed to be paid for the wood shavings. Lonn posed as a representative of M & R Lumber and created phony invoices, which he mailed to the parent company to bill them for the shavings, keeping the money for himself.
According to court documents, Long Beach Shavings discovered Lonn’s activities in late 2010. At a dinner in late December 2010, Lonn was confronted by company representatives, and he apologized and pledged to pay the company back. The company’s owners met again with Lonn, who again apologized and agreed to repay the company. He was not fired at that time. However, the false invoice scheme continued and Lonn was finally fired in August of 2011. By then, Lonn had started his own competing wood shavings operation in Elma.
“This defendant did not commit just a single act of embezzlement, rather, over the course of years, he stole from the company almost every day,” said U.S. Attorney Annette L. Hayes. “He betrayed the trust of his family members to satisfy his greed and then used the stolen money to start his competing business harming his victims even further.”
Testimony at trial revealed that Lonn never paid income taxes on the stolen money in tax years 2009 and 2010; had he done so, his tax bill for those years would have increased by more than $80,000, according to the Dept. of Justice release.