GRAND RAPIDS, Mich. (WOOD) — The president of a Grand Rapids-area investment company will spend years in prison for a fraud scheme involving millions of dollars.

Sixty-one-year-old Gifford Cummings Jr., who goes by “Chip,” was sentenced to five and a half years in federal prison and two years of supervised release. He will also have to pay $5,755,477 in restitution, according to the U.S. Attorney for the Western District of Michigan.

He was charged in October on several counts of fraud.

The scheme dates back to December 2018, when Cummings, who was serving as president and CEO of Red Oak Capital, was trusted with a $1.35 million check of the company’s funds to be used to pay down a line of credit to Northeast Bank. Instead, federal investigators say, he deposited the money into an account called Northwind Financial, which he controlled. He did this “by means of false and fraudulent pretenses to Lake Michigan Credit Union,” according to a federal indictment.

To cover it up, Cummings marked the Northeast Bank line of credit as “repaid” in Red Oak’s books and records. He told business partners and investors that it had been paid off when it was not.

Nearly a year later, between November 2019 and July 2020, Cummings invested $5 million of Red Oak’s money into an account with Woodstock Capital without letting his partners know or give consent, the indictment alleges. When Cummings’ partners found out, they demanded he redeem the investment.

He did not, the indictment says. Instead, he allegedly created a fake letter saying the funds had been redeemed as well as five false account statements, which he emailed to his Red Oak partners.

“Mr. Cummings deliberately cheated investors out of hundreds of thousands of dollars for his personal gain,” wrote U.S. Attorney Mark Totten in a release from the U.S. Department of Justice. “Financial fraud is a serious problem, and my office will not hesitate to prosecute fraudsters whose schemes inflict devastating financial harm on legit businesses and honest investors.”