CHARLESTON, W.Va. — A well-known Charleston business developer will spend time in federal prison for bankruptcy fraud.
John H. Wellford III, 73, of Charleston, was sentenced Wednesday to one year and one day in prison, which will be followed by three years of supervised release. Welford will also be ordered to pay $730,326.43 in restitution for his falsification of bankruptcy records.
According to court documents and statements, Wellford filed for bankruptcy on behalf of Corotoman Inc., the real estate development company he owned and operated. Wellford filed for bankruptcy on March 29 2019.
Wellford admitted that he did not disclose the transferring of $925,326.43 from Corotoman in May 2018 to Marsh Fork Development, another one of his businesses.
Before transferring the $925,326.43 to Marsh Fork, Wellford depostied a $1,978,101.40 check from American Electric Power on or around April 30, 2018. Of the $925,326.43 transferred to Marsh Fork, $680,000 of that was transferred by Wellford to his lawyer’s client trust account.
Wellford admitted to the transactions being to ensure his maintaining of possession over the money in order to use the funds for his businesses. On May 28, 2019, Wellford attended a meeting of the creditors, where he said Corotoman hadn’t made payments to creditors other than the ordinary course of business in the prior year.
United States Attorney for the Southern District of West Virginia, Will Thompson, who joined the U.S. Trustee Program, the FBI, and the WV State Police Bureau of Criminal Investigation on the case said, “Mr. Wellford went to great lengths to carry out this crime of deception.”