(Adds details of charges, bankruptcy, background, bylines)
NEW YORK, Aug 8 (Reuters) - Three former executives at Transmar Commodity Group Ltd have been charged with defrauding banks to win a $400 million credit line for their now bankrupt, New Jersey-based cocoa trading company, federal prosecutors said on Tuesday.
Peter G. Johnson, who was Transmar's chief executive; his son Peter B. Johnson, who oversaw Transmar's Euromar Commodities affiliate; and former finance vice president Thomas Reich were each charged with bank fraud, wire fraud affecting a financial institution, and conspiracy to commit fraud.
The defendants are making appearances in Manhattan federal court on Tuesday afternoon. Their lawyers declined immediate comment.
Transmar, a Morristown, New Jersey-based unit of Transmar Group Ltd, had sold cocoa products to chocolate makers such as Hershey Co and Nestle SA prior to filing for Chapter 11 protection last Dec. 31.
Prosecutors accused the defendants of "lying repeatedly" from 2014 to December 2016 by giving banks false "borrowing base" reports that inflated the amount of collateral Transmar had to support its borrowings.
Transmar owed the banks roughly $360 million at the time of the bankruptcy, prosecutors said.
Peter G. Johnson, 68, of Harding Township, New Jersey, and Peter B. Johnson, 38, of Morristown, were arrested at their homes on Tuesday morning, while Reich, 59, of Montvale, New Jersey, surrendered later to the FBI, prosecutors said.
Each defendant faces up to 30 years in prison on each count, prosecutors said. Transmar's bankruptcy case was converted to a Chapter 7 liquidation on July 26.
The criminal case is U.S. v. Johnson et al, U.S. District Court, Southern District of New York, No. 17-cr-00482. The bankruptcy case is In re: Transmar Commodity Group Ltd, U.S. Bankruptcy Court, Southern District of New York, No. 16-13625. (Reporting by Jonathan Stempel and Brendan Pierson in New York; Editing by Steve Orlofsky and Chris Reese)