Marlborough frozen seafood company owner gets two years in prison
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Sea Star Seafood Corp.'s former Marlborough location on Bartlett Street.
The owner of a former Marlborough-based seafood distributor has been sentenced to two years in federal prison for bank fraud.
James Faro, 61, of Dover, will also serve three years of supervised release. U.S. District Court Judge Timothy S. Hillman on Monday also ordered Faro to pay more than $1.2 million in restitution, according to the U.S. Attorney's Office of Massachusetts.
Faro was the owner and president of Sea Star Seafood Corp., a frozen seafood distributor. His former chief financial officer, John J. Crowley, 62, of Florida, will be sentenced next week after pleading guilty.
Both were charged in January.
For about two years between 2010 and 2012, the Faro and Crowley overstated the value of the company’s outstanding accounts receivable to increase the level of assets against which the company could borrow from a bank via an asset-backed loan agreement.
In August 2012, the company informed the bank that it discovered a discrepancy of more than $2.5 million in its reported versus actual accounts receivable. The company declared bankrupcy and closed its business one week later.
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