The long-time manager of a Hoquiam wood shavings business was convicted Wednesday in U.S. District Court in Tacoma of thirteen federal felonies following a six-day jury trial, announced U.S. Attorney Annette L. Hayes. Willis D. “Bill” Lonn, Jr., 68, of Aberdeen was convicted 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. The jury deliberated about two hours before returning the guilty verdicts. U.S. District Judge Benjamin H. Settle scheduled sentencing for January 9, 2017.
According to records filed in the case and testimony at trial, Lonn was a long time manager for Long Beach Shavings Company (LBS). The company was owned by Lonn’s uncle and cousins and was based in California. The company had one plant in Hoquiam, Washington where it processed wood shavings for use on farms, at horse shows or in pet stores.
Lonn had worked at the Hoquiam plant for about a decade when he launched a scheme in the 2000s to steal and sell the wood shavings products for his own enrichment. Lonn did this by selling the shavings directly to customers in Washington and Oregon without turning the proceeds over to the company.
Later in the scheme, Lonn arranged to get wood chips for free from a Montesano lumber mill, but he informed the parent company that an entity named M & R Lumber needed to be paid for the wood shavings. Lonn posed as M & R Lumber and created phony invoices to bill LBS for the shavings. Lonn then kept the money.
Between the two schemes Lonn obtained more than $1.3 million from LBS. He was terminated by the company in 2011 when the full scope of the scheme came to light.Testimony at trial revealed that Lonn never paid income taxes on the ill-gotten gain in tax years 2009 and 2010. Had Lonn reported the income his tax bill for those years would have increased by more than $80,000.
Testimony at trial revealed that Lonn never paid income taxes on the ill-gotten gain in tax years 2009 and 2010. Had Lonn reported the income his tax bill for those years would have increased by more than $80,000.
The case was investigated by the U.S. Postal Inspection Service (USPIS) and the Internal Revenue Service Criminal Investigation (IRS-CI). The case was prosecuted by Assistant United States Attorneys Brian D. Werner and Nicholas Manheim.