The owner of a defunct plastics compounding operation in Massachusetts and his wife were indicted Feb. 7 for arson as well as insurance and bank fraud. A fire destroyed an Advance Resins Corp. compounding and recycling warehouse in Chico-pee, Mass., March 5. A federal grand jury indicted Mark and Karen Bruck on seven counts following an investigation by the Bureau of Alcohol, Tobacco and Firearms, the state fire marshal and the Chicopee Fire Department.
If convicted on all counts, Mark Bruck faces maximum penalties of 115 years in prison and $1.75 million in fines. Karen Bruck faces a sentence of as much as 100 years in prison and $1 million in fines. They live in Westfield, Mass. The U.S. District Court in Springfield, Mass., has not set an arraignment date.
The firm and sister company Westover Color & Chemical Corp. filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code in April, and their assets were auctioned in August.
Mark Bruck is charged with intentionally setting fire to a warehouse containing used equipment and plastic inventory to defraud MassWest Insurance Co. of West Springfield, Mass. The indictment also alleges the Brucks inflated the value of property destroyed in the fire.
It alleges that Mark Bruck obtained an extra $1.9 million in insurance coverage for his business about a week before the fire and directed employees to move used equipment and in-ventory into the warehouse before the blaze. It also charged that the Brucks defrauded banks on sales and inventory between 1986 and 1994 to obtain loans.
Jeffrey Kinder, a Justice Department lawyer, said in an interview from Springfield, Mass., that ``anyone who risks the safety of firefighters for personal gain will be vigorously prosecuted.'' He would not comment on evidence in the case.
Chicopee Fire Chief Robert Nunes said investigators quickly eliminated accidental causes. Suspicious circumstances included evidence that the heating plant and power were not operating. Nunes said no firefighter was injured in the fire, but the incident subjected 75 firefighters to mental stress and exposed them to chemical fumes with unknown long-term consequences.
Mark Bruck disputed the charges. He said he has no plan to re-enter the plastics industry and has returned to school to study European history.
``The whole thing is a disgrace,'' Bruck said. ``We lost everything, including our house.''
The indictment states that Advance Resins' financial health declined steadily in 1992 and 1993 and the firm suffered severe cash-flow problems in March 1994. Two weeks before the fire, the defendants added a third building to their business's insurance policy and increased the coverage by $1.9 million. The indictment alleges that about a week later Mark Bruck told employees to move ``flammable plastic inventory'' into the third building. The indictment alleges Mark Bruck set fire to the building at two or more locations.
Bruck said the U.S. Army Corp of Engineers found a 1 million-gallon jet-fuel leak under Advance Resins' buildings six years ago, but it would have cost him $10 million to move. The firm's three buildings were converted U.S. Air Force hangars. He said four years ago the Air Force and owner of the industrial park wanted Advance Resins to relocate but they would not finance a move.
In bank fraud conspiracy allegations, the indictment states the Brucks had two separate sets of company books, one of which showed inflated accounts receivable and inventory. Alleged fictitious accounts in 1992 included a sale worth $20,000 to Plastifab Inc. of Elk Grove Village, Ill., and a $15,000 sale to Dare Products Inc. of Battle Creek, Mich. The defendants allegedly conspired repeatedly to defraud the Bank of New England, the New Bank of New England and Fleet Bank ``for the purpose of obtaining loan proceeds for which the business did not qualify,'' the indictment charges.
Bruck criticized ATF, saying its actions to subpoena bank records caused BayBank of Springfield, Mass., to withhold a $500,000 loan after the fire. BayBank called its loans and Advance Resins was forced to file for federal bankruptcy protection under Chapter 11, he said. In March 1994, Bruck said welders were working in the building six hours before the fire.