AmerLink official admits fraud

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By Christopher Brooke, Reporter

 WILMINGTON, N.C. ee* A senior official with AmerLink log home manufacturing pleaded guilty Feb. 1 to committing bankruptcy fraud, apparently in an effort to keep the company on track for reorganization instead of a liquidation, according to a press release from a U.S. District Attorney's Office.

John M. Barth Jr. pleaded guilty before Senior U.S. District Judge James C. Fox after being charged Jan. 8.

AmerLink has been in bankruptcy proceedings for a year now, starting out as a voluntary filing for Chapter 11 to reorganize the company while seeking relief from its $20 million in debts.

A review by the bankruptcy court led to AmerLink's bankruptcy being changed to a Chapter 7, the breaking up and selling off of the company's assets to satisfy its debts.

A trustee found that Amerlink had no business activity, and recommended the change to a liquidation.

"To keep Chapter 11 proceedings going, it is necessary to show that the debtor has sufficient capital to meet its operating needs," the U.S. attorney's press release states. "Barth falsely led the bankruptcy court to believe that a $200,000 balance would be maintained in the debtor-in-possession bank account, when in fact no such balance existed."

Barth also "fabricated bank statements" to show a deposit of $120,000 in order to support monthly reports submitted to the bankruptcy court, according to the press release.

When the company's creditor, the National Consumer Cooperative Bank, began foreclosing on $8.2 million in loans on AmerLink's operating assets and real estate, Barth created another phony document, the press release said. 

"To delay foreclosure, Barth fabricated an e-mail, from his father, who had the financial means to assume the $8.2 million in NCB," the press release said. "Barth then sent the fabricated e-mail to NCB, who relied upon it by agreeing to delay the foreclosure on AmerLink's operating assets."

This e-mail was discussed in the court bankruptcy case with Barth present. 

"Ultimately, the bankruptcy court entered an order delaying NCB's right to foreclose in reliance on the false $8.2 million guarantee," the press release concludes.

Carroll County is one of the parties that AmerLink is indebted to, due to a failed economic development effort that was supposed to create 200 jobs.

Carroll sued for the return of $600,000 in economic development funds and 32 acres of land provided to AmerLink in the economic development deal.

Both the lawsuit by Carroll County and the bankruptcy proceedings are continuing as the court seeks depositions from AmerLink officials.