On August 8, 2017, a federal court in New York unsealed the indictment charging Peter G. Johnson, Peter B. Johnson, and Thomas Reich with defrauding banks by using false “borrowing base” reports that were designed to secure a $400 million line of credit for their company. As part of this fraud, the defendants allegedly lied repeatedly about the financial condition of the company and, through “borrowing base” reports required by the banks, deceived lenders about the collateral that was available to secure what they had borrowed. The evidence against the defendants includes emails regarding how the paperwork was fake. The company ultimately filed for bankruptcy in December 2016, and at that time, owed the banks approximately $360 million. The three men were each charged with one count of conspiracy to commit bank fraud and wire fraud affecting a financial institution, one count of bank fraud, and one count of wire fraud affecting a financial institution. Each charge carries a sentence of up to 30 years in prison. United States v. Johnson, et al., 17-cr-00482 (S.D.N.Y.).