MUKILTEO — The co-founder of a Mukilteo-based commercial flooring company must serve two years behind bars for embezzlement, a U.S. District Court judge ruled Friday.
David Gluth, 47, of Everett, founded Gluth Contract Flooring in 2007 with a friend who invested $500,000 in the company’s startup. For years, Gluth went behind his friend and business partner’s back to take money from company accounts to pay for “luxury” vacations, liquor, Nordstrom shopping and his home mortgage, according to court records.
Gluth and the company bookkeeper allegedly worked together in schemes to commit fraud through the company from 2011 to 2016. The pair engaged in “numerous acts of deceit and concealment,” federal charging papers say, including fraudulently applying for and receiving loans, forging business records, lying to Gluth’s business partner and refusing to turn over records the partner was legally entitled to have. The bookkeeper also is facing criminal charges, according to court records.
The pair opened up numerous bank accounts in the company’s name without informing, or getting consent, from Gluth’s business partner. Gluth and the bookkeeper allegedly discussed fraud schemes and plans on instant messenger. In one conversation on Feb. 10, 2014, Gluth messaged the bookkeeper about applying for a loan with a company account.
“I’m doing it without (the business partner’s) knowledge,” Gluth wrote, “So if anything goes wrong it won’t be good.”
The pair was accused of forging a driver’s license using the business partner’s name in 2015. The fake ID had a photo of a different company employee on it.
In 2016, the company went bankrupt. An FBI investigation found that over $1 million was lost through improper personal purchases, improper disposal of assets and unauthorized debt incurred at the business.
Gluth was charged with embezzlement in November 2020. The Everett man pleaded guilty to felony wire fraud in January. In addition to prison time, Gluth must pay his business partner $325,000 in restitution.
“You treated the victim like your personal ATM,” U.S. District Court Judge Richard A. Jones told Gluth at his sentencing hearing. “Your return on (your friend’s) investment was to orchestrate a significant and devastating fraud.”
The bookkeeper was indicted in federal court for felony wire fraud in July 2020. As of Friday afternoon, she had not entered a plea.
Ellen Dennis: 425-339-3486; firstname.lastname@example.org; Twitter: @reporterellen
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