Bloomberg News

Canopy Financial Co-Founders Sentenced to Prison for Fraud

February 15, 2012

(Adds case background in second paragraph.)

Feb. 15 (Bloomberg) -- Canopy Financial Inc. co-founders Anthony Banas and Jeremy Blackburn were each sentenced to more than 13 years in prison after pleading guilty to what U.S. prosecutors said was a $93 million investment fraud scheme.

Canopy was a provider of financial processing services for the health-care industry. Prosecutors alleged the men used false information about the Chicago-based company’s financial condition to raise about $75 million from private equity investors. They were also accused of stealing almost $19 million from clients’ health savings and flexible spending accounts.

Each man pleaded guilty to a single count of wire fraud in 2010. Blackburn said in court papers that he had schemed with Banas and others to defraud Canopy investors and clients in 2008 and 2009, using that money to pay for vacation expenses and for luxury automobiles.

U.S. District Judge Ruben Castillo in Chicago today sentenced Banas, 34, of Homer Glen, Illinois, to 160 months in prison. Banas had been Canopy’s chief technology officer.

Blackburn, 38, of Bolingbrook, Illinois, was the company’s president and chief operating officer. He received a 15-year term from Castillo on Jan. 24.

The criminal case is U.S. v. Blackburn, 09cr976, U.S. District Court, Northern District of Illinois (Chicago).

--Editors: Peter Blumberg, Mary Romano

To contact the reporter on this story: Andrew Harris in Chicago at aharris16@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net


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