The former chief financial officer of Vann’s Inc. has been sentenced to 14 months in federal prison followed by three years of supervised release for conspiring to defraud the company.
Paul Lyn Nisbet was sentenced Thursday in federal court in Missoula by U.S. District Court Chief Judge Dana Christensen.
“This is not a situation where Mr. Nisbet simply failed to yell fire as the house burned,” Christensen said.
Nisbet, 47, and former CEO George Leslie Manlove were charged last December with more than 200 federal counts alleging that they conspired to defraud Vann’s, an appliance and electronics retailer that closed three years ago after declaring bankruptcy.
Prosecutors accuse the men of making shell companies and having Vann’s lease property from them, without permission from the rest of the board of directors. Court documents also say Manlove used company money on personal expenses like tuition for himself, vacations and jewelry for family members, and membership fees at private clubs, with Nisbet’s knowledge and approval.
In June, as part of a plea agreement with prosecutors, Nisbet pleaded guilty to a single count of conspiracy to have his other charges dropped.
Nisbet’s attorney Colin Stephens said Thursday his client was “caught between a rock and a hard place,” referring to the board of directors and the “somewhat megalomaniac” Manlove. He added that public stigma of the charges and being "castigated in the media" has already had an effect.
“Mr. Nisbet has lost the lion’s share of his good name,” Stephens said.
Nisbet himself said over the 12 years he worked for Vann’s, he had always tried to help it to be successful.
“There is nothing I wouldn’t do for that company,” he said. “I’m incredibly sorry and remorseful.”
Federal sentencing guidelines set a recommendation of 30 to 37 months in prison for Nisbet, and his attorney asked the judge to only impose community supervision or probation. Christensen said he felt the former too severe and the latter not enough of a punishment.
Christensen said he reached his sentencing decision after reading presentence reports, as well as 14 character letters on behalf of Nisbet that urged the judge to be lenient, and victim impact statements from former Vann’s employees.
“I know that the victims, the employees of Vann’s, desire punishment,” he said. “Whatever sentence I impose in this case will send a message to the community in general.”
In addition to his prison and supervision, Nisbet agreed to pay $122,250 in property forfeiture from the proceeds he gained by the conspiracy.
Restitution from the conspiracy totals $906,300. A hearing to determine the amount of restitution Nisbet owes is set for Nov. 16. A civil lawsuit against the two former executives filed on behalf of the former employees was settled for $7.3 million in 2014.
Nisbet was released Thursday to make arrangements before reporting to his prison placement. Christensen said he would recommend Nisbet be sent to a minimum-security facility in Sheridan, Oregon.
In September, the judge moved Manlove’s trial from October to Jan. 9 after his attorneys requested a yearlong delay.