A federal grand jury last week indicted the former owner of Tougher Industries on charges of embezzlement, tax evasion and making false statements to secure a $6.1 million loan.
Five months after law enforcement officials arrested Steven Shaw on criminal charges stemming from a Berkshire Bank loan he sought for Tougher, a grand jury in Albany handed up the seven-count indictment.
The indictment states Shaw, of Lake George, allegedly embezzled $31,200 from the Capital District Physicians’ Health Plan health care benefit program for Tougher between the August and October 2006. He also allegedly attempted to evade paying income tax by failing to file income tax returns to the Internal Revenue Service for 2004 through 2006.
The grand jury also indicted Shaw on the charge of making false statements, overstating his assets and net worth, plus falsifying personal financial statements, a personal biography, tax returns and other supporting documents. Shaw allegedly made those false statements to support a Tougher application for a loan insured by the Federal Deposit Insurance Corporation.
IRS and Secret Service agents took Shaw into custody at Gore Mountain Wednesday. He was later arraigned and pleaded not guilty to the indictment’s charges. He was released on $25,000 bond. Shaw is facing a maximum 53 years in jail and $1.53 million in fines, according to Assistant U.S. Attorney Grant Jaquith.
Before seeking a bankruptcy court’s protection less than two years ago, Tougher was one of the Northeast’s largest heating, ventilation and air conditioning companies.
Shaw’s attorney William Dreyer did not immediately return a call Thursday seeking comment.
When Shaw was arrested in September, a federal attorney said he faced at least a $1 million fine and up to 30 years in jail.
Shaw’s legal problems started around November 2006, when Tougher filed for Chapter 11 reorganization. After the HVAC company that once employed 300 nearly collapsed in late 2006, U.S. Bankruptcy Court Judge Robert Littlefield put a trustee in charge of its reorganization.
The Chapter 11 trustee, Lee Woodard, has filed several civil complaints against Shaw, his longtime companion and his associates. Woodard alleged they bilked Tougher out of thousands of dollars.
In a separate civil suit, a U.S. District Court judge in January ordered Shaw must pay $100,000 plus interest to the three business partners from whom he bought Tougher in 2005.
In November, Tougher Mechanical Enterprises, an affiliate of J Nortbert Properties in Massachusetts, received Littlefield’s approval to buy the Albany HVAC company for $650,000.