Cedar Rapids transport shipping broker convicted of bank fraud for submitting invoices for $550,000 of nonexistent freight

CEDAR RAPIDS - A Cedar Rapids transportation broker pleaded guilty Wednesday in federal court to defrauding a bank by submitting fake invoices for at least $550,000 worth of freight that didn't exist.

David Giannetto, owner of Professional Freight Sales Inc., 6102 Tia CT NE in Cedar Rapids, admitted during a plea hearing that he defrauded Farmers State Bank by selling false invoices with the intent to receive money for shipping jobs he didn't broker.

He hesitated at first to admit that he intended to defraud the bank, saying he was trying to save his business. But after conferring with his lawyer, he admitted intent to defraud.

Giannetto waived his right to have the case go before a grand jury for indictment.

The criminal information shows Giannetto would match companies needing to ship goods with trucking companies for transport. The shipping companies would pay Giannetto an agreed amount for arranging the shipping and Giannetto would pay the trucking companies an agreed fee.

Farmers State Bank had a 'business manager agreement” with Giannetto in which it fronted credit to Giannetto when he sold invoices from the shipping companies to the bank.

Court documents detailed the relationship between Giannetto and the bank.

From January 2008 through January 2010, Giannetto sold fake invoices for at least $550,000 to the bank, which they paid him, but these were not real obligations owed to Giannetto, according to the criminal information.

Prosecutors included one example of the fake billings for $1,985 to Bay Valley Foods. The invoice stated it was sold Jan. 15, 2010, but no such sale was made, according to the criminal information.

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