The manager of a Hoquiam wood shavings company was sentenced today to three years in prison for 13 federal felonies stemming from his theft of $1.3 million from the business.
Willis D. Lonn Jr. was convicted in October 2016 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. He was a longtime manager for Long Beach Shavings Company, owned by his uncle and cousins.
The company had one plant in Hoquiam, where it processed wood shavings for use on farms, at horse shows or in pet stores. Lonn worked there for approximately a decade when he launched a scheme in the 2000s to steal shavings and sell them directly to customers in Washington and Oregon, without turning the proceeds over to the company.
Later in the scheme, he 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 that he mailed to LBS to bill them for the shavings. Between the two schemes, he 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.
“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.”
Lonn was sentenced in U.S. District Court in Tacoma. In addition to the prison sentenced, he was also given three years of supervised release.