Feds: Coeur d’Alene man convicted of obtaining $1.5 million through wire fraud

COEUR d’ALENE — A federal jury convicted a local man this week for a multimillion-dollar accounts receivable factoring scheme. 

Douglas Worman, 63, of Coeur d’Alene, was convicted Tuesday on 17 counts of wire fraud. Jurors acquitted Worman of five counts of bank fraud. A grand jury indicted Worman on the charges last May. 

“I extend my gratitude to the jurors who diligently performed their civic duty and gave careful consideration to the evidence in this complex case,” U.S. Attorney Josh Hurwit said in a news release.  

Worman owned and operated Worman Forest Management, a forestry management company based in Coeur d’Alene. 

In 2010, Worman entered into a factoring agreement with U.S. Richards Forestry Management to sell millions of dollars of Worman Forest Management’s accounts receivable that were based on invoices for work the business had provided to its customers, according to the U.S. Attorney’s Office. 

Factoring is a form of short-term financing in which a business sells its accounts receivable to a third-party at a discount. In a factoring transaction, the seller of an invoice obtains immediate funding from a buyer, and the buyer of an invoice earns a fee for providing the upfront financing. 

Between 2015 and 2018, Worman submitted “inflated and entirely false and fraudulent invoices” to J.S. Richards Forestry Management for factoring, according to prosecutors. 

Worman submitted more than $2 million in false and fraudulent invoices between June 2018 and September 2018, according to court records, purportedly for work performed by Worman’s company. However, prosecutors said, the invoices were for amounts that were “inflated and entirely fictitious.” 

Worman fraudulently obtained at least $1.5 million from J.S. Richards Forestry Management as a result of the scheme, court records said. 

“Fraud schemes may not be violent, but victims can suffer staggering losses from such crimes, which is why the FBI will seek accountability and justice,” Shohini Sinha of the Salt Lake City FBI said in a news release. “Even if there’s an association or a relationship built on trust between two parties, always thoroughly research an investment opportunity, and report any potential fraud to the FBI.” 

Worman is scheduled to be sentenced Dec. 10 by Chief U.S. District Judge David C. Nye. He faces a maximum penalty of 20 years in federal prison for each count of wire fraud.