GRAND RAPIDS – Federal prosecutors on Monday filed what is expected to become a torrent of charges against ex officers of the collapsed CyberNET Group starting with four against its former president for defrauding banks out of $100 million in loans for his personal use.
Former CyberNET President James Horton was accused of conspiracy, bank fraud, and money laundering in a criminal information complaint filed in federal court in Grand Rapids. The maximum penalty is 30 years in prison.
The complaint alleges CyberNEt executives obtained more than $100 million in loans for equipment that didn’t exist at its downtown Grand Rapids offices. The FBI has alleged there were a series of deals that enriched Horton, founder Barton Watson – who killed himself – and Barton’s widow Krista Kotlarz-Watson.
The charges came after the FBI raided CyberNET’s offices in the fall of 2004. A few days later, Waton was found dead in his posh suburban Grand Rapids home of apparent self inflicted gunshot wounds.
Horton has been cooperating with federal prosecutors in the investigation.
The CyberNET Group was an Internet ISP and datacenter. The company when it closed had 120 employees in Grand Rapids, and about 1,000 worldwide in Chicago, Las Vegas, the United Kingdom, Philippines, Australia, Hong Kong and China.
