Walter P. Lambert, aka "Buddy," 73, of Pen Argyl, pleaded guilty to 16 counts of mail fraud, five counts of wire fraud, and one count of interfering with the due administration of the Internal Revenue Service. Lambert was the CEO of Blue Mountain Consumer Discount Company, a consumer loan company based in Wind Gap.

Officials say he defrauded lenders into loaning over $5 million to BMCDC by promising them a high rate of return (typically 9 percent or 10 percent), which Lambert usually paid to the investors in cash and failed to document with the IRS.Lambert told lenders that the company would use the lenders' funds to issue high-interest loans to consumers (at an interest rate of approximately 23 percent to 26 percent), allowing the company a profit of approximately 13 to 16 percent after paying lenders their 10 percent return.However, Lambert used the funds for his own benefit, including: to pay the company's overhead (including his own salary); to purchase a life insurance policy for himself; to purchase personal items and collectibles for himself and his family members; to pay for gasoline and repairs to personal cars owned and used by himself, his family members, and the owner of the company; and to issue loans to himself, his children, and other "preferred" consumers at a rate of 6 percent interest per year or less, rather than the annual interest rate of 23 percent to 26 percent that the lenders were quoted.Lambert is charged with causing 20 lenders to lose $2.26 million and caused the IRS to sustain a tax loss of at least $252,621 for tax years 2007 through 2009.He faces a sentence of 51 to 63 months in prison, up to a three-year period of supervised release, restitution to the IRS, a fine of up to $5.5 million, and a $2,200 special assessment.Sentencing is scheduled for Dec. 29.