MANHEIM, Pa. – A family-owned Pennsylvania energy company has abruptly shut down as it faces a potential fraud involving tens of millions of dollars after the brief disappearance of its CEO.
Worley & Obetz, based in Manheim, closed its doors Monday after 72 years in the residential heating oil, propane and HVAC business, leaving about 250 workers unemployed, LNP reported.
"It's horrible beyond belief," co-owner Seth Obetz said. "We have such a great team who didn't do anything wrong other than work hard and take great care of customers. We have great customers who don't deserve this."
Last week, the company announced layoffs of more than 100 workers and the shuttering of its commercial operations, saying the actions were "due to potentially fraudulent activity" and that the layoffs followed the "disappearance of our CEO, Jeff Lyons." Lyons had been reported missing May 15 but was found days later and subsequently fired. A message seeking comment from him at a home phone listing wasn't returned Tuesday.
Seth Obetz told LNP he doesn't know Lyons' whereabouts, but he never returned to the company and was terminated "with cause."
The company said the FBI is investigating the alleged fraud, along with local authorities. No one has been charged.
A restructuring plan to keep Worley & Obetz afloat was rejected by lenders.
Obetz told the newspaper he and his father, Bob Obetz, both resigned Monday as part of the closure process.
Four local banks have told the Securities and Exchange Commission they'll have multimillion-dollar losses over fraud committed by an employee of Worley & Obetz, according to American Banker. They are Fulton Financial, based in Lancaster; Univest, based in Souderton; S&T Bancorp, based in Indiana, Pennsylvania; and Franklin Financial Services, based in Chambersburg. Their combined losses could be more than $60 million.
Fulton Financial was the lead lender in the participation loan, and said it doesn't typically identify customers but in this case the client had been "independently confirmed."
"Fulton is saddened by the events that its longtime customer has experienced, and by the fact that those events caused that business to be unable to continue to operate," Fulton spokeswoman Laura Wakeley told LNP.
Information from: LNP, http://lancasteronline.com