Swisshelm pleads guilty to $5.6M fraud scheme

A Springfield restaurateur whose bankruptcy set off a chain reaction of closures and business moves in the local economy has now pleaded guilty to a multimillion-dollar fraud scheme.

Bruce Swisshelm, 68, of Battlefield pleaded guilty yesterday to bank fraud and money laundering. His son, Bruce Swisshelm II, 43, of Springfield, pleaded guilty in a separate appearance to concealment of a felony, according to a news release from the office of Tammy Dickinson, U.S. attorney for the Western District of Missouri.

Through Swisshelm Properties Inc. and Horned Frog Deli Inc., the elder Swisshelm owned and operated restaurant brands Burger King, Macaroni Grill, San Francisco Oven, McAlister’s Deli, Ebbetts Field and Fog City Coffee. Swisshelm II served as president of Swisshelm Properties.

Between February and June 25, 2011, Swisshelm submitted false financial documents to Great Southern Bank to receive four commercial loans totaling $5.6 million. In the statements, Swisshelm claimed his businesses generated 2010 net income of $780,000, when they actually lost $1.8 million that year. The bank relied on the false information in Swisshelm’s submitted statements in approving the loans, according to the release.

The younger Swisshelm was involved in communications with Great Southern, attended meetings at the bank and signed bank documents related to the loans. While Swisshelm II was told of his father’s fraud scheme after the loans were issued, the release said he failed to notify authorities of the illegal activity.

Under the terms of the plea agreement, the elder Swisshelm must pay the government $5.6 million, and, under federal statutes, he could be subject to 40 years in federal prison without parole, fines of up to $1.3 million and a restitution order. Swisshelm II could face three years in prison and fines of up to $250,000. A sentencing hearing will be scheduled following the presentence investigation by the U.S. Probation Office, according to the release.

In March 2012, Swisshelm filed Chapter 7 bankruptcy, claiming $7.7 million in assets against $17.6 million in liabilities. In the wake of the filing, San Francisco Oven was taken over by Springfield businessman Gordon Elliott; the south-side Ebbets closed while the center city location sold to a group of investors; and Macaroni Grill shuttered its doors, according to Springfield Business Journal archives.