Former Hopkinton lumber company president sentenced for bankruptcy fraud

The former president of a lumber mill in southeast Delaware County has been sentenced to almost four years in federal prison after diverting more than $450,000 from the company to a personal bank account, the U.S. Attorney's Office said.

Keith Chapman, 41, of Marion, former president of the Chapman Lumber Co., pleaded guilty in July to two counts of bankruptcy fraud and one count of filing a false tax return.

He admitted that between 1999 and 2005 he used money from a company loan for personal use - to pay for membership in a country club, golf equipment, jewelry, clothing and prostitutes, the U.S. Attorney's Office said.

When he filed a bankruptcy petition for the lumber company in 2005, he lied about what happened to the money and failed to report it as income when he filed tax returns.

Chapman, reached by telephone Friday, declined to comment. “I absolutely do not want to make a statement,” he said.

U.S. District Court Chief Judge Linda Reade sentenced Chapman on Thursday to 46 months in prison, and ordered him to pay $286,000 in restitution to the United States Trustee's Office and Internal Revenue Service.

Sand Springs is an unincorporated village of about 40 people between Hopkinton and Monticello. Chapman Lumber Co. is now Bruggeman Lumber Inc.

Chapman has been free on bond and is set to surrender to the Bureau of Prisons on a date yet to be set.