Mar 15, 2018 4 min read

A Washington County businessman faces charges that run the gamut from a claim he defrauded a small-business lender by diverting money from companies he controlled to pay personal expenses to an accusation he possessed a handgun he was barred from having due to a previous conviction.

A federal grand jury returned a 13-count indictment Wednesday against George Retos Jr., 69, of Washington, on charges of wire fraud, tax evasion, conspiracy to defraud the United States, false bankruptcy declaration and unlawful possession of a firearm by a felon.

“George Retos Jr. is alleged to have used multiple businesses he controlled as his personal slush fund, siphoning money for his use at casinos and for the purchase of a BMW for a relative, among other things.

In doing so, the indictment alleges he committed myriad serious crimes, including engaging in two fraud schemes separately targeting a government-backed lender and the Pennsylvania unemployment compensation system, as well as participating in a conspiracy to defraud the IRS out of significant unpaid business taxes,” U.S. Attorney Scott Brady of the Western District of Pennsylvania said in a statement.

Much of the indictment focuses on Retos’ relationship to three companies based at the same Detroit Avenue address in Washington: plastics product manufacturer Prime Plastics Inc., which petitioned for bankruptcy in 2013; Plastic Power Inc., which court papers say was “purportedly in the business of leasing employees to Prime Plastics”; and Branikas Investments, which owned the property and leased it to the manufacturer.

The president of Branikas and Prime Plastics was a close friend of Retos’ named in court papers only s “J.M.” Another person, referred to only as “N.R.,” was president of Plastic Power. Neither is charged in the case.

Despite the others’ ostensible leadership, federal prosecutors said in court papers Retos “effectively controlled the personnel, finances and operations” of all three companies.

For his part, Retos maintained in a statement sent through a spokesperson “the allegations are a misrepresentation of facts” and his goal was to bring jobs to the area.

“Like most start-up businesses, we struggled with cashflow issues, and many far-greater challenges than we ever anticipated,” his statement read, in part. “As a result, we, along with our dedicated employees, suffered both business and personal losses. The plant closing put over 60 good people out of work.”

In 2008, J.M. reportedly acted at Retos’ direction to apply for and receive two Small Business Administration-guaranteed loans totaling $2 million from Preferred Capital BIDCO Inc. with Branikas as co-borrower and the money in the two companies’ bank accounts as collateral.

Up until May 2013, “hundreds of thousands of dollars” of loan proceeds and assets from the businesses allegedly went toward “personal expenses,” checks payable to Retos and his family members and purchases and automated teller machine withdrawals at casinos in Las Vegas and Western Pennsylvania.

The indictment also accuses Retos of concealing his income and assets by putting his business interests in N.R.’s and J.M.’s names and using his businesses’ funds to pay personal expenses between early 2009 and late 2013. That period coincided with a federal judge’s order in 2010 that Retos pay more than $1 million in back taxes he owed as of February 2009 for various calendar years stretching back as early as 1987.

Federal prosecutors also allege Retos and N.R. engaged in a conspiracy to avoid payroll and employer taxes that involved transferring employees from Prime Plastics to Plastic Power, which purportedly “leased” the employees back to the other company.

Retos also allegedly had people who were full-time employees of Prime Plastics – and some who were nominally working for Plastic Power at some point – to fraudulently apply for unemployment compensation – so he could cut the pay they got from working for him.

Retos also allegedly possessed a .380-caliber Kel Tec handgun – plus 14 hollow-point bullets of the same caliber – on June 26, 2013, despite a 1992 conviction on charges of income tax evasion, false statements in connection with a credit application, mail fraud and interstate transportation of stolen property.

Retos was previously an attorney and represented the Washington County Authority and county Industrial Development Authority before the 1992 indictment that resulted in his conviction by a federal jury.

Retos also faces theft charges in a separate case in Washington County Court which dates to 2013.