Portland woman found guilty of embezzling $300,000 from Chinese firm that wanted to buy paper mill

John Clarke Russ | BDN
Posted Aug. 19, 2014, at 6:04 a.m.
Last modified Aug. 19, 2014, at 10:41 a.m.

PORTLAND, Maine — The Cumberland County jury on Friday found a Portland woman guilty of embezzling more than $300,000 from a Chinese firm that had sought to invest in a Baileyville paper mill in 2009.

Jurors deliberated for about an hour and 10 minutes before finding Jody Flynn, 61, guilty of Class B theft by unauthorized taking between December 2009 and January 2010, according to Assistant Attorney General Leanne Robbin, who prosecuted the case.

Flynn was a founding partner in Red Shield Environmental, which bought with three other firms the Old Town mill that closed last week for $1 in 2006. She worked as the director of marketing and business development for the firm, according to a 2006 story published by Mainebiz.

In June 2008, Red Shield filed for Chapter 11 bankruptcy. The mill was purchased in October 2008 by New York investment firm Patriarch Partners for $19 million, creating Old Town Fuel & Fibers. About 180 workers were furloughed Wednesday.

Flynn had no formal training in investment, according to documents provided by Robbin. She earned a bachelor’s degree in social work in 1975 from the University of New Hampshire. Flynn said in a deposition taken March 22, 2011, that in 1999 she read a book on how to become an investment banker.

“I knew a lot of business people in town because of my political fundraising efforts, and I knew a lot of lawyers,” Flynn said in the deposition. “So a lot of lawyers and business people would refer clients to me to consult with them about, you know, how to form their business.”

She spent the money on personal expenses, including more than $20,000 for her daughter’s tuition at Boston University and $10,000 for an Audi for her son, Robbin said Monday. Flynn also reportedly invested $60,000 in real estate and spent thousands on antiques and expensive jewelry.

“This conviction sends a message to people who want to invest in Maine businesses that their money is safe here,” the prosecutor said.

Efforts to reach Flynn’s attorney, Thomas Hallett of Portland, were unsuccessful Monday.

Flynn formed Greentree Renewable Energy Inc. in 2009 with Berthier “Bert” Martin, who was not prosecuted, to help finance and facilitate the purchase of the former Domtar paper mill, now Woodland Pulp LLC. Martin was an investor in Red Shield, according to Robbin.

The mill was purchased in October 2010 by International Grand Investment Corp., a Hong Kong investment firm, for $64 million, according to Bangor Daily News archives. Martin was a consultant on that deal, Robbin said.

On Nov. 25, 2009, Guangzhou Dinson Engineering and Trading Ltd. wired $500,000 through its parent company, Charmwell Holding Ltd., to Greentree’s checking account, according to documents filed at the Cumberland County courthouse. Less than two weeks later, Domtar backed out of the deal, and the company directed Flynn to return the $500,000 less payment of any outstanding invoices.

That amount should have been $381,803, according to Robbin.

Over the next seven weeks, Flynn, who was the only person authorized to withdraw funds from Greentree’s account, systematically withdrew the funds from the account, according to court documents. Instead of returning it, she deposited it into her personal checking account and moved more than $70,000 through Foster Island LLC, co-owned by Alvin Mack of Portland, that made its way back to her personal checking account, according to the prosecutor.

Martin worked on the deal with International Grand Investment Corp., which eventually bought the mill from Domtar. It is owned by Charmwell Holding Ltd., the same firm that paid Greentree the money Flynn embezzled. When Martin was paid for his role in the final sale, the money Flynn did not return was deducted from his $1.5 million fee.

He sued Flynn in Cumberland County Superior Court to recoup that money, Robbin said Monday. That case was stayed when Flynn was indicted by the Cumberland County grand jury in February 2012.

Robbin said she did not know how the civil case would be impacted by Flynn’s criminal conviction.

Flynn is scheduled to be sentenced Sept. 29, the prosecutor said Tuesday in an email.

She faces up to 10 years in prison and a fine of up to $20,000. She also is expected to be ordered to pay restitution to Martin.

SEE COMMENTS →

ADVERTISEMENT | Grow your business
ADVERTISEMENT | Grow your business

Similar Articles

More in Portland