Prosecutor: Bill Hynes used UFD as 'personal piggy bank' - former CEO ordered to trial

After five hours of testimony Tuesday – mostly an FBI agent poring through sheaths of bank statements, invoices and associated financial documents – it was time for the lawyers to address whether former United Fiber & Data CEO Bill Hynes should stand trial for allegedly stealing more than $4 million from the company he started with members of the rock band Live.

Hynes' lawyer Jonathan White argued that no crime had even taken place, that UFD wasn’t a victim of a crime and that any discrepancies over the money that Hynes diverted through various business and personal bank accounts was a civil matter and did not warrant four felony charges.

Among the issues was the $5 million that Louis J. Appell III – son of legendary local magnate and philanthropist Louis J. Appell Jr. - loaned UFD and expected to be paid back with money from a state redevelopment grant.

Once the grant money came through, though, Hynes is accused of diverting that money for other purposes, mostly to buy the former Metso building on Arch Street to convert the former industrial site into a retail/commercial/entertainment venue instead of paying Appell back.

White argued that once the state money flowed to the privately held company, UFD, and Hynes as its CEO, was free to spend it how they saw fit. (Later, after some fiscal issues came to light, Hynes was restrained by an agreement that limited his ability to freely spend the company's money.) Appell, as outlined in the loan agreement, expected to be paid back within 15 days of UFD receiving the money, but he testified previously that he still hasn’t been paid back, having reached a settlement in civil litigation over the matter, one of the many lawsuits involving the former '90s rock icons Live.

“The business would have the right to use those funds as they choose,” White argued before District Magisterial Judge Thomas Harteis Tuesday afternoon. “In essence, what we have is Mr. Appell loaned money to UFD and is upset that he hasn’t been paid back. There is no victim here.

“Mr. Appell may not be happy with how that money was spent, but that is a civil matter and has been settled.”

Prosecutor Tim Barker scoffed at that notion. He previously argued that any civil settlement does not absolve Hynes of criminal liability. He further argued Tuesday that Hynes’ seemingly endless movement of money from account to account was “a classic Ponzi, money laundering scheme.”

“UFD is, in fact, a victim,” Barker argued, noting that the company was deprived of money it could have used for other endeavors. “It is sophistry to assert that they are not a victim.”

The arguments came at the end of a two-part preliminary hearing to determine whether Hynes should stand trial on theft charges. During the first part of the hearing, in November, Appell, his wife and an accountant for UFD testified about Hynes' business dealings and how he was evasive and at times deceptive when asked about the money.

Tuesday’s hearing focused on the paper trail with FBI Special Agent Michael Mocadlo going through bank statements that showed money had been moved among various business accounts, and Hynes' personal accounts.

In one instance, Hynes had asked Appell to invest in the redevelopment of the Metso building. Appell had testified that he would consider it if Hynes put $500,000 of his own money into the project. Instead, Mocadlo’s testimony illustrated, Hynes solicited a $500,000 loan to UFD from a trust and then moved the money from a little used company account – one that had a balance of little more than $500 – to his personal account to make it appear the money had originated from him. And then, Barker said, he put the money into a UFD account, noting that it was a loan, from him, making it appear that he had loaned UFD the money while UFD was on the hook for the loan from the trust.

“UFD just loaned $500,000, at 12 percent interest, to itself,” Barker said. “He was using UFD as his personal piggy bank.”

Mocadlo, who had previously investigated financial crimes, including a $59 million Ponzi scheme that targeted Amish and Mennonite families in 2021, meticulously dissected the financial documents to provide evidence to back Barker’s assertions.

In one instance, Mocadlo testified about invoices from a television production company that was providing services for Hynes’ interest in Stadium Super Truck racing. The invoices would be emailed to Hynes, he said, and then Hynes would alter them to remove any references to racing before submitting them to UFD’s accountant for payment. The invoices totaled $275,000 from 2017 to 2019. Mocadlo testified that UFD employees told him that Hynes was not permitted to use company funds to pay for his racing interests.

For instance, one of the invoices, for $50,000, was for television production services for races in Texas and Detroit. When the invoice landed on the accountant’s desk, it had been scrubbed of any reference to racing and mentioned just “TV production.”

White argued that the FBI hadn’t checked the metadata on the emails to prove that Hynes had sent them. He also argued that the racing expenses were for advertising and marketing.

Previously: Louis Appell III, others testify against Bill Hynes at hearing on alleged $4M UFD theft

In another instance, Mocadlo testified about an invoice from YRK LLC, a publishing and marketing company run by Live’s Think Loud companies, that was intended to pay for services to develop an app. The amount of the invoice, though, coincided with the balances on Hynes' American Express cards – one platinum card carried a balance of more than $73,000 – and shortly after the invoice was paid, Hynes’ credit cards were paid off.

Mocadlo and Pennsylvania State Police Trooper Timothy Reynolds both testified that nobody at UFD was aware of any such app in development. Reynolds testified that he spoke with UFD’s head information technology person who said he had never heard of it. The app, Mocadlo testified, was never developed.

The charges: Bill Hynes charged with stealing $4.39 million from United Fiber and Data

At the hearing's end, Judge Harteis ruled the prosecution had supplied enough evidence to justify bringing the charges.

Hynes was scheduled for formal arraignment in Common Pleas Court on Jan. 16. He remains free on $25,000 bail.

Columnist/reporter Mike Argento has been a York Daily Record staffer since 1982. Reach him at mike@ydr.com. 

This article originally appeared on York Daily Record: Bill Hynes ordered to stand trial for stealing more than $4 million