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A West Virginia real estate developer was sentenced to one year and one day in prison for falsification of bankruptcy records.

According to the charges brought against him, John H. Wellford III, 73, filed for bankruptcy in March 2019 on behalf of Corotoman Inc., a real estate development company he owned and operated. As part of the bankruptcy, Corotoman’s Statement of Financial Affairs required Wellford to disclose all monetary transfers from Corotoman outside the ordinary course of business that had occurred in the two years prior to filing for bankruptcy.

However, Wellford did not disclose that roughly one year earlier he transferred $925,326.43 from Corotoman to Marsh Fork Development, another of his businesses. Approximately 10 months prior to the bankruptcy filing, Corotoman received a large influx of cash while it was struggling financially and while one of its creditors was actively trying to collect on an outstanding debt. Wellford deposited a $1,978,101.40 check from American Electric Power in Corotoman’s bank account on or around April 30, 2018. Wellford then transferred $925,326.43 of the funds to Marsh Fork Development on or around May 2, 2018.

From that money, Wellford transferred $680,000 to his lawyer’s client trust account. Over the next five months, Wellford caused his lawyer to transfer the entire $680,000 back to various businesses that Wellford owned, primarily Marsh Fork Development.

Wellford admitted these transactions were to ensure that he maintained possession and control over the money so that he could use the money for his businesses. Additionally, when Wellford attended a May 2019 meeting of creditors, he testified that Corotoman had not made any payments to creditors outside the ordinary course of business in the year prior. When Wellford twice amended Corotoman’s bankruptcy filings to account for other undisclosed transactions that took place at the same time as the transfer, he failed to disclose the transfer.

After his prison sentence, Wellford will undergo three years of supervised release. He was also ordered to pay $730,326.43 in restitution for falsification of bankruptcy records.

US Attorney Will Thompson said the punishment was “at the upper range of the advisory guideline range and reflects the nature and seriousness of Mr. Wellford’s offense. It is also appropriate given his background. Simply put, he should have known better and he should have done better.”