Legislation&Legal

Former Republic CEO Charged with
Fraud, Theft, Relating to Close of Company



Republic Windows and Doors’ former president Richard Gillman was arrested on September 9 with charges related to fraud, according to his attorney, Ed Genson of Genson & Gillespie.

Court documents allege that Gillman and several others, who have not yet been named, “formulated and executed a scheme to defraud Republic’s debtors by abandoning Republic’s debt, hijacking its collateralized assets and transporting them to Red Oak, Iowa, with the intent of using the stolen property to create a successor to Republic” (see January 2009 USGlass, page 14).

The state also alleges that those involved “enriched themselves, stole corporate funds, created companies and bank accounts for fraudulent purposes, laundered stolen money, criminally converted manufacturing equipment and concealed it in ten semi-trailers, transporting three of the semi-trailers to Red Oak, Iowa, and hiding the remaining semi-trailers in a southwest side trailer park; stole business equipment, destroyed business documents, created phony receivables, and engaged in computer ‘hacking.’”

The “proffer in support of setting bond” filed against Gillman cites several others as involved in the alleged scheme; they are known as Individual A (chief operating officer) and Individual B (director of manufacturing). At press time, their names had not been released.

Though Republic announced last December that it was closing, the state alleges that the company’s downfall became imminent as early as mid-2008, as the company “was seriously in arrears on payments to creditors and it was nearly certain that insolvency was imminent.” Prosecutors allege that Gillman and his alleged co-conspirators aimed to abandon the company’s debts and secretly relocate the company’s “collateralized manufacturing equipment” to an existing window factory in Red Oak, Iowa (also known as Echo Windows).

“The ultimate goal of the conspiracy was to use the stolen property to create a successor window manufacturing company to Republic that Gillman would operate, free of responsibility of the staggering debt that his mismanagement created,” writes John Mahoney, assistant state’s attorney deputy supervisor, in the proffer. Mahoney is with the state attorney office’s public corruption and financial crimes unit.

The state names a variety of victims of the alleged conspiracy, including Republic and its bankruptcy estate, several creditors and the employees of Republic “who were deprived of their earned wages, accrued benefits and severance package.”

Many in the industry predicted this day would come as authorities were looking into the matter of the missing equipment. Serious Materials purchased the former Republic plant and had brought back approximately a dozen of the workers. USGlass visited Serious Materials earlier this year (see July 2009 USGlass, page 17) at the time of Vice President Joe Biden’s visit and at that time Chuck Wetmore, director of operations for Serious Materials, told USGlass that seven trucks from the former owners on their way to Echo Windows, arrived back at the Chicago plant in February. According to Wetmore the trucks never made it to the Echo facility in Iowa as they were stopped by state police.

Prosecutors note that the sit-in of Republic’s workers, which drew national attention, allowed bankruptcy consultants the ability to recover much of the information needed in the case.

“The employee occupation of the factory, while apparently peaceful and orderly in nature, effectively prevented Gillman, Individual A, Individual B, Employee B and others from re-entering Republic’s offices or the manufacturing floor,” writes Mahoney. “As a result, Bankruptcy Consultant and other agents of the bankruptcy trustee were able to recover many of the documents referred to herein.”

Meanwhile, the union representing Republic’s workers released a statement about the recent charges.

“We hope to see justice served in this case, but we know that many other workers suffer and deserve justice as well. In part that can come about labor law reform that would ensure, for the first time, penalties for violations of labor law and by aggressively holding corporations accountable when they violate our rights,” reads the statement.

UE Local 1110 President Armando Robles, a maintenance worker added, “We knew Gillman was lying to us for a long time, now the rest of the world knows it too. Workers suffer with bad bosses all the time so this is a victory for all workers.”

At press time, Gillman’s bail had been decreased to $5 million, and he was released on bond on September 25. State Attorney’s Office deputy communications director Tandra Simonton advised USGlass the investigation is ongoing.

“At this time no other information is being released,” says Simonton. “This is a continuing investigation.”

Texas Adopts BIM for State Design and Construction Projects
The Texas Facilities Commission (TFC), the agency within the State of Texas that oversees the state’s real estate development as owners and operators of state facilities, has adopted building information modeling (BIM) for state design and construction projects. By making BIM the standard for all new buildings, TFC says it can gauge energy usage, as well as forecast energy consumption based on model simulations; model multiple high-performance building scenarios based on minimal design time; simulate or identify security issues related to building type; and connect the model to existing databases or control systems for bi-directional, real-time data exchange.

The FDC has also developed a set of standards and guidelines as well as an interoperable BIM template that all private sector partners will have access to prior to any involvement in a state project.

The BIM process is designed to help architects, engineers, constructors, subcontractors and vendors collaborate with an intelligent model, allowing them to visualize and simulate using precise data before any building material is purchased, brought to the site or erected. According to Denise Beneke, an architect with the San Antonio-based MarmonMok Architecture, BIM can help architects and subcontractors, including contract glaziers, better model the building.

“You find problems and are able to solve them early in the design instead of having the building half built and realizing there’s a conflict and trying to find a solution,” Beneke says. “There are actually software programs that many contractors use that allow them to find these problem areas by importing the architectural, structural and MEP models. More specifically, [BIM] if used to its fullest potential and all the correct information is input by the architects and engineers, the program can do material take-offs and give a more accurate material quantity, which can also be helpful to subcontractors. Also, if the model is made available to the contractors and subcontractors for viewing, they can better understand the building and bid it more accurately.”



USG
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