SHELLEY M. DAY, 45, formerly of Mercer Island, Washington was sentenced today to 30 months in prison and five years of supervised release for Bank Fraud. Over the course of a year, DAY defrauded Asia Europe Americas Bank of Seattle of more than $1.5 million. DAY claimed that she was selling a portion of her company, Hulabee Entertainment, Inc. to Disney Interactive and later to Vivendi Universal Publishing in order to secure large loans from the bank. DAY used the money to attempt to purchase a $3 million "dream home" on Mercer Island. The purchase was never completed. In sentencing DAY, U.S. District Judge Thomas S. Zilly called DAY "a sophisticated, educated person setting out to defraud anyone to reach her goals."
According to court records DAY repeatedly misled the bank providing forged documents to bolster her applications for large loans. In March 2002, DAY told the bank loan officer that Hulabee Entertainment was going to be sold to Disney Interactive. DAY even presented a phoney "Letter of Intent" from Disney and other supporting documents that indicated she would receive $2.5 million from the sale. After the bank agreed to that loan, and later loaned her additional funds, DAY fell behind and ultimately stopped making payments. She told the bank that the sale of her company was being "renegotiated" and again provided forged documents. She falsely claimed Disney Interactive had been acquired by Vivendi Universal Publishing, which therefore "delayed" the sale of her company. Again she produced forged documents from Vivendi Universal Publishing to bolster her fraud. DAY asked bank officials not to contact Disney or Vivendi saying that would "jeopardize the deals." After a year of DAY’s misleading the bank, a lawyer for the bank contacted Disney and discovered it was all a sham.
Describing this conduct in her memo to the court, Assistant United States Attorney Janet Freemen noted that the bank was a relatively small, homegrown financial institution. "One can only imagine how the loan officers’ hearts sank upon learning that everything the defendant had represented to them regarding Disney Interactive, Vivendi Universal, the "letters of intent," and the "contract negotiations," were all one big fabrication; a story for which they would later be accountable to federal banking regulators."
DAY was a founder of Humongous Entertainment which went on to be the third-largest publisher of children’s software creating such popular characters as Freddi Fish and Pajama Sam.
Defense attorneys asked that DAY be allowed to delay reporting to prison until April 2006 saying she had new children’s games in the works that could be quite profitable. Judge Zilly rejected that request saying that sounded too much like what she told the bank. As he imposed sentence Judge Zilly stated "others need to be told you cannot create fraudulent documents and go to the bank and basically steal money." The case was investigated by the FBI and prosecuted by Assistant United States Attorney Janet Freeman. For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, Western District of Washington, at (206) 553-4110.