The former CEO of one of the nation's largest makers of paper products was convicted Wednesday of engineering a $300 million fraud in a futile bid to save the failing company from bankruptcy.
A federal jury returned its verdict against Mehdi Gabayzadeh, 60, who was accused of swindling banks, financial institutions and investors of nearly $300 million while he was chief executive of American Tissue, once the nation's fourth-largest maker of toilet tissue and other paper products.
The company's failure caused mills in Berlin and Gorham, N.H., to close in September 2001, with more than 850 workers laid off. Another company has since bought the mills, which reopened in June 2002; it now employs about 600 people.
U.S. District Court Judge Joanna Seybert scheduled sentencing for July 8. Gabayzadeh faces a maximum of 60 years in prison, as well as fines and restitution.