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A transportation and freight company owner pleaded guilty in U.S. District Court in Missoula last week to defrauding investors of $1 million.

Jason Matheny, owner of Davis Transport, pleaded guilty on Aug. 13 to federal wire fraud, which carries a maximum penalty of 20 years in prison and a $250,000 fine.

Prosecutors charged in court documents that Matheny invited two men to work with him and invest in his companies in 2016. After several months of due diligence and negotiating, the two men each invested $500,000. 

Davis Holdings, Matheny told the investors, was a shell company his bank told him to set up, according to court records. However, Davis Holdings at the time owed $1 million to other creditors. The two investors told federal prosecutors they were not informed of the $1 million debt prior to their investment, and that Matheny's previous representations about the company's financial health had been instrumental in their decision to buy into the company. 

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Bank records showed that Matheny's bank had immediately taken $500,000 of the investment, and used another $134,000 to pay down a line of credit, according to charging documents. At the time of the investment in 2016, some accounts "were overdrawn and the bank was covering checks," according to prosecutors. 

Matheny was charged in U.S. District Court on July 16 with federal wire fraud, and a plea agreement was filed the same day. Prosecutors will pursue a $1.4 million restitution, and Matheny has agreed to pay back the money lost, according to the agreement.

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The final figure will be up to the judge at Matheny's Nov. 22 sentencing hearing, where parties, including the victims, will testify. 

A message left for Matheny on Monday was not returned.

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