FBI: “Five Charged with Fraud in Wilkes-Barre City Employees Federal Credit Union Investigation”

August 25, 2014

The Federal Bureau of Investigation (FBI) on August 21, 2014 released the following:

“The United States Attorney’s Office for the Middle District of Pennsylvania announced that a Grand Jury in Scranton returned indictments Tuesday charging five members of the Wilkes-Barre City Employees Federal Credit Union with conspiracy and bank fraud. The indictments were sealed pending the arrests and/or voluntary surrender of the defendants today.

According to United States Attorney Peter Smith, Tino Ninotti, age 35, Jason Anthony, age 34, Leo Glodzik, age 43, Amanda Magda, age 30, and Jeffrey Serafin, age 35, were charged in three separate indictments related to activities of the credit union. Glodzik is also charged with tampering with a witness. Magda was the assistant manager at the Credit Union; Jason Anthony is a Wilkes-Barre City Police Officer; Ninotti is a former Wilkes-Barre City Police officer; Glodzik is a contractor whose company had a towing contract with the City of Wilkes-Barre.

Four of the defendants appeared today before Magistrate Judge Karoline Mehalchick in federal court in Wilkes-Barre. Ninotti, Anthony and Glodzik were released from custody and ordered to report to pretrial services. Glodzik was ordered to surrender his passport. Serafin was released on his own recognizance. The hearing for Magda is expected to take place later today.

The indictments, unsealed today, allege that the defendants, during 2014, individually or by aiding and abetting one another, secured loans from the Credit Union by means of false and fraudulent pretenses, including the use of false collateral, the stolen identities of others who were not aware of loans in their names, and forgery. Magda and Anthony are charged in one indictment; Ninotti, Glodzik and Magda in a second indictment; and Serafin alone in the third indictment.

If convicted, the defendants face up to 30 years in prison and fines in the amount of $1,000,000.

According to the U.S. Attorney the charges are a significant step in an ongoing corruption investigation by the FBI. The case represents the pursuit of allegations against individuals; the FBI and the U.S. Attorney’s Office value the close working relationships they have with local police departments, including Wilkes-Barre’s, and with honest police officers. These relationships will continue.

The prosecution is the result of a joint investigation by the Federal Bureau of Investigation (FBI), and the Pennsylvania State Police (PSP) which plays an integral role in investigations of fraud and public corruption. Prosecution is assigned to Assistant United States Attorney Michelle Olshefski.

Luzerne County citizens, as well as employees and officials of local government are urged to come forward and provide relevant information about this case and others involving corruption in local government by contacting the Scranton FBI Office at 570-344-2404.

Indictments and Criminal Informations are only allegations. All persons charged are presumed to be innocent unless and until found guilty in court.

A sentence following a finding of guilty is imposed by the Judge after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.

Under the Federal Sentencing Guidelines, the Judge is also required to consider and weigh a number of factors, including the nature, circumstances and seriousness of the offense; the history and characteristics of the defendant; and the need to punish the defendant, protect the public and provide for the defendant’s educational, vocational and medical needs. For these reasons, the statutory maximum penalty for the offense is not an accurate indicator of the potential sentence for a specific defendant.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Klary Arcentales Indicted by a Federal Grand Jury For Conspiracy to Commit Bank Fraud and Bank Fraud in an Alleged $2 Million Mortgage Fraud Scheme

May 16, 2013

The Federal Bureau of Investigation (FBI) on May 15, 2013 released the following:

“Bergen County Woman Indicted in $2 Million Mortgage Fraud Scheme

NEWARK, NJ— A Bergen County, New Jersey woman was indicted today for her role in a long-running, large-scale mortgage fraud scheme that caused millions of dollars in losses, U.S. Attorney Paul J. Fishman announced.

Klary Arcentales, 44, of Lyndhurst, New Jersey, was charged in a five-count indictment with one count of conspiracy to commit bank fraud and four counts of bank fraud, all of which caused losses of at least $2 million.

According to the indictment and other documents filed in this case:

As early as 2006, Arcentales engaged in a mortgage fraud conspiracy through a company called Premier Mortgage Services (PMS). Arcentales, a loan officer at PMS, provided fraudulent documents to financial institutions in connection with mortgage loan applications on behalf of “straw buyers” to induce those financial institutions to fund mortgage loans. Relying upon those false documents, financial institutions funded mortgage loans. Arcentales then profited illegally by receiving a commission from PMS for each mortgage loan that she closed and also profited illegally by diverting portions of the fraudulently obtained mortgage proceeds for herself.

Conspirator Lester Soto, 56, previously charged by complaint, was a part-owner of PMS. He also acted as a loan officer on certain PMS mortgage loan applications. Soto took a percentage of PMS’s profits. Soto employed document makers to create fraudulent documents in furtherance of the scheme and put loan officers at PMS, including Arcentales, in contact with these document makers to create other false and fraudulent documents.

Conspirator Linda Cohen, 55, previously charged by Complaint, was a paralegal who closed transactions on behalf of a licensed New Jersey attorney. Cohen served as the settlement agent on mortgage loans brokered by Arcentales for various properties. Cohen convened closings, received funds from lenders, and prepared HUD-1 forms—which itemize services and fees charged to borrowers for mortgage loans—that purported to reflect the sources and destinations of funds for mortgages on subject properties. In fact, the HUD-1s were neither true nor accurate. At or following the closings, Cohen disbursed mortgage loan proceeds directly to PMS, herself, and others, including in amounts not reflected on the HUD-1s. Cohen received a fee for each fraudulent loan in which she participated.

Conspirator Antonio Pimenta, 45, previously charged by complaint, owned and managed Kelmar Construction Co., which built properties that were then sold to straw buyers utilizing fraudulent mortgage loans brokered by Arcentales.

The indictment charges Arcentales with one count of bank fraud conspiracy and four counts of bank fraud, each punishable by a maximum potential penalty of 30 years in prison and a fine of $1,000,000.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Aaron T. Ford; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s charges. Fishman also thanked the Social Security Administration-Office of Inspector General, under the direction of Special Agent in Charge Edward Ryan, for its participation in the investigation.

The government is represented by Assistant U.S. Attorneys Rahul Agarwal of the U.S. Attorney’s Office General Crimes Unit and Zach Intrater of the Economic Crimes Unit in Newark.

This case was brought in coordination with President Barack Obama’s Financial Fraud Enforcement Task Force. The task force was established to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. Attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed nearly 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, please visit http://www.stopfraud.gov.

The charges and allegations contained in the indictment and complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.”

Federal Bank Fraud Crimes – 18 U.S.C. 1344

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Manhattan U.S. Attorney Announces Arrests of Two Individuals in Alleged Multi-Million-Dollar Scam Involving Elderly Woman

May 3, 2012

The Federal Bureau of Investigation (FBI) on May 2, 2012 released the following:

“Preet Bharara, the United States Attorney for the Southern District of New York; Eric T. Schneiderman, the New York State Attorney General; and Janice K. Fedarcyk, the Assistant Director in Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), announced charges today against IFEANYICHUKWU ERIC ABAKPORO and LATANYA PIERCE for allegedly swindling an elderly woman out of her multi-million-dollar property in Harlem that she had owned for more than 40 years and then deceiving a bank into giving them a $1.8 million mortgage loan secured by the property. ABAKPORO was arrested Monday in Queens, New York, and PIERCE was arrested yesterday after voluntarily surrendering to the FBI.

Manhattan U.S. Attorney Preet Bharara stated: “As alleged, these two defendants preyed on an elderly woman, using false documents and fraudulent representations to essentially steal her property out from under her. They then allegedly took their brazen scheme one step further, using the property to deceive a bank into lending them more than a million dollars. Sadly, this type of mortgage fraud scheme and exploitation of vulnerable victims have become all too familiar, but as these charges make clear, we are committed to bringing those who perpetrate these types of harmful schemes to justice.”

New York State Attorney General Eric Schneiderman stated: “Through lies and deception, these individuals abused the trust of an elderly woman in order to perpetrate a multi-million-dollar fraud. Now that their despicable scheme has been exposed, they will face justice.”

Assistant Director in Charge Janice K. Fedarcyk stated: “These defendants are charged with spinning a web of lies to steal the victim’s property. Cases like this are rightly a priority for the FBI: fraudulent schemes that victimize the vulnerable and enrich the unscrupulous.”

As alleged in the indictment unsealed yesterday in Manhattan federal court:

Beginning in March 2006, ABAKPORO, a lawyer with an office in Brooklyn, New York, and PIERCE, who worked for ABAKPORO, cultivated a relationship with an elderly woman (“the Victim”) who owned a residential apartment building worth millions of dollars located at 1070 St. Nicholas Avenue in Harlem (the “Property”). As part of the fraud scheme, ABAKPORO and PIERCE earned the Victim’s trust by, among other things, offering to help her manage the Property. This included collecting rent from its tenants on her behalf. However, instead of providing the Victim with the renters’ money, ABAKPORO and PIERCE pocketed it.

ABAKPORO and PIERCE then convinced the Victim to sell her property to them for $3.1 million. While they contracted to buy the property for that amount, at the closing, they presented the Victim with multiple fake and fraudulent checks to make it appear as if they had paid the contracted sale amount, when in fact they had not. Moreover, after the Victim’s attorney had left the closing, ABAKPORO and PIERCE fraudulently induced her to return all of the checks to them by representing that they would safeguard her money and give her a “private mortgage” in the Property, which they explained would include monthly payments made to her based on the money she had effectively loaned them. As part of the scheme, ABAKPORO and PIERCE signed and provided the Victim with a written agreement representing that she had loaned them approximately $1.9 million and in return held a “private mortgage” in the Property. Unbeknownst to the Victim, ABAKPORO and PIERCE never recorded the private mortgage and subsequently submitted a fraudulent application to Washington Mutual Bank seeking a $1.8 mortgage loan secured by the Property. ABAKPORO and PIERCE never disclosed to the bank that the Victim already held a private mortgage on the Property. Instead, ABAKPORO and PIERCE falsely represented to the bank that they had purchased the Property for $3.1 million and owned it “free and clear.” Based on those, and other, fraudulent representations, ABAKPORO and PIERCE obtained a $1.8 million mortgage loan from the bank, which they failed to repay.

As a result of the alleged fraud, the defendants obtained substantially all of the Victim’s assets, and $1.8 million in fraudulently obtained mortgage proceeds. The Property went into default.

***

ABAKPORO, 52, a Nigerian citizen, is a resident of Queens, and PIERCE, 43, is a resident of Brooklyn. They are each charged with wire fraud, bank fraud, wire fraud conspiracy, and bank fraud conspiracy. The wire fraud and wire fraud conspiracy charges each carry a maximum prison term of 20 years. The bank fraud and bank fraud conspiracy charges each carry a maximum prison term of 30 years.

ABAKPORO is currently detained pending his satisfaction of court-ordered bail conditions: a $1 million bond secured by an interest in property and co-signed by three individuals. PIERCE was released on a $500,000 bond to be co-signed by three individuals and secured by two properties.

Mr. Bharara praised the New York State Attorney General’s Office investigative staff and the FBI for their excellent work on the investigation of this matter. He also thanked the New York State Department of Financial Services for its assistance.

The case is being handled by the Office’s Complex Frauds Unit. Southern District of New York Assistant U.S. Attorneys Ryan Poscablo and Michael Lockard, along with Assistant Attorney General Meryl Lutsky, who has been designated a Special Assistant U.S. Attorney, and Assistant Attorney General Rhonda Greenstein, are in charge of the prosecution.

The charges contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

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To find additional federal criminal news, please read Federal Criminal Defense Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition Defense, OFAC SDN Sanctions Removal, International Criminal Court Defense, and US Seizure of Non-Resident, Foreign-Owned Assets. Because we have experience dealing with INTERPOL, our firm understands the inter-relationship that INTERPOL’s “Red Notice” brings to this equation.

The author of this blog is Douglas C. McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Loan Brokerage Company, Its Owners, and an Associate Indicted for Alleged $37 Million Bank Fraud Conspiracy

November 17, 2011

The Federal Bureau of Investigation on November 16, 2011 released the following:

“BALTIMORE— A federal grand jury has indicted Jade Capital & Investments, LLC, and its owners, brothers Joon Park, a/k/a “Joon Pak,” and “Joon Paik,” age 41, of Falls Church, Virginia, and Loren Young Park, a/k/a “Loren Yong Park,” and “Yong Park,” age 44, of Vienna, Virginia, on charges connected to a scheme to fraudulently obtain business loans guaranteed by the Small Business Administration, with resulting losses alleged to be over $37 million. Nick Park, a/k/a Nochol Park, age 46, of McLean, Virginia, an associate of Joon and Loren Park, but no relation, was also charged in the scheme. The indictment was returned on November 8, 2012 and unsealed today.

The indictment was announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Special Agent in Charge Richard A. McFeely of the Federal Bureau of Investigation; and Small Business Administration Inspector General Peggy E. Gustafson.

“This fraud scheme created untenable risks for the Small Business Administration’s (SBA) guaranteed loan programs and effectively denied opportunities for small businesses deserving access to capital to finance and grow their businesses,” said Small Business Administration Inspector General Peggy E. Gustafson. “The SBA Office of Inspector General will continue to aggressively investigate and seek criminal prosecution or civil remedies when fraud is perpetrated by corrupt borrowers or loan brokers as they attempt to obtain financial assistance through SBA’s guaranteed loan programs. We would like to thank the U.S. Attorney’s Office for its dedicated leadership and professionalism throughout this investigation.”

According to the nine count indictment, Jade Capital was a loan brokerage company operated by Joon and Loren Park and specializing in securing loans for individuals interested in purchasing or refinancing small businesses in the Mid-Atlantic area. According to the indictment, Joon, Loren and Nick Park encouraged prospective borrowers using the services of Jade Capital to apply for business loans through the SBA’s Section 7(a) program, which guaranteed 75 percent – 90 percent of qualified loans made by banks and other commercial lending institutions. Under this program, the principals of the small business seeking the loan were required to invest a certain amount of their own money, called an equity injection, before they qualified for a loan. The banks and other lending institutions making the loan bore the risk of payment default only up to the percentage of the loan not guaranteed by the SBA.

The indictment alleges that from February 2005 until October 2011, Joon, Loren, and Nick Park submitted SBA loan applications and supporting documentation to loan originators and underwriters on behalf of their clients. The indictment alleges that the packages contained fraudulent personal financial statements and/or monthly bank statements which overstated the net worth and equity injection of the borrowers and falsely enhanced the creditworthiness of the borrowers and their businesses.

The indictment alleges that Joon and Loren Park altered copies of the borrowers’ monthly bank statements to fraudulently reflect more money than was actually in the accounts; created false bank statements for accounts that did not exist; and provided some of the financial institutions with misleading summaries of the borrowers’ business experience in order to falsely enhance the borrowers’ ability to manage the business and make the required loan payment.

The indictment further alleges that Joon, Loren and Nick Park and Jade Capital supplied some financial institutions with fraudulent gift letters falsely representing the source of the borrowers’ down payments and equity injections. Also according to the indictment, Joon Park, Loren Park and Jade Capital submitted financial documentation to lenders that misrepresented the equity injection of the principal owners of 51 businesses that had applied for SBA-guaranteed loans. In addition, the defendants charged a loan brokerage fee to both the financial institutions and the borrowers for assembling and submitting loan application packages that resulted in the issuance of SBA-guaranteed loans.

The indictment alleges that Joon Park submitted fraudulent documentation, including a personal financial statement and monthly bank statements in connection with an SBA loan application for a car wash business in which he was the principal owner.

Finally, the indictment seeks forfeiture of $37,852,390, all interest in Jade Capital, the car wash business owned by Joon Park, and other bank accounts and property derived from or constituting the proceeds of the scheme.

The defendants face a maximum sentence of 30 years in prison for the bank fraud conspiracy and for each count of bank fraud. Joon Park and Nick Park had initial appearances today in U.S. District Court in Baltimore and were detained. A detention hearing is scheduled for Joon and Nick Park on Friday, November 18th at 10:30 a.m. Loren Park is being sought.

An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.

This law enforcement action is part of President Barack Obama’s Financial Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general, and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.

United States Attorney Rod J. Rosenstein thanked the FBI and SBA Office of Inspector General for their work in the investigation. Mr. Rosenstein praised Assistant U.S. Attorneys Martin J. Clarke and Leo J. Wise, who are prosecuting the case.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

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To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.


Mark A. Conner Plead Guilty to Charges of Conspiracy to Commit Bank Fraud and to Perjury in Connection with His Personal Bankruptcy Filing in Federal Bankruptcy Court

October 24, 2011

The Federal Bureau of Investigation (FBI) on October 21, 2011 released the following:

“Former Bank President Agrees to Plead Guilty in Multi-Million-Dollar Bank Fraud Conspiracy and Perjury in His Personal Bankruptcy Case

Conner Fleeced Failed Stockbridge Bank and at Least Ten Other Federally Insured Banks

ATLANTA— MARK A. CONNER, 45, formerly of Canton, Georgia, and Tallahassee, Florida, and the former president of FirstCity Bank of Stockbridge, Georgia, pleaded guilty today to charges of conspiracy to commit bank fraud in connection with misconduct at FirstCity Bank in the years before the bank’s seizure by state and federal authorities on March 20, 2009. CONNER also pleaded guilty to perjury in connection with his personal bankruptcy filing in federal bankruptcy court in January 2011.

United States Attorney Sally Quillian Yates said, “Our nation’s bank problems have contributed to the economic distress our citizens continue to experience across the country. We have felt this keenly in Georgia, with more than 70 bank failures since mid-2008, and another failure as recently as October 14, 2011. This defendant treated FirstCity Bank’s commercial real estate lending operations like his own personal piggy bank, siphoning off millions of dollars from fraudulent commercial real estate loans, ultimately running FirstCity into the ground. Along the way, CONNER and others defrauded federal and state regulators and at least ten other federally insured banks in Georgia and Florida that invested in the fraudulent multi-million-dollar loans.”

FDIC Inspector General Jon Rymer said, “The Federal Deposit Insurance Corporation Office of Inspector General is pleased to join our law enforcement colleagues in defending the integrity of the financial services industry by investigating bank fraud perpetrated by senior bank officers. We are especially concerned in situations like this one where the former Chairman and CEO of the bank misused his position of trust to defraud FirstCity Bank of Stockbridge, thus contributing to its failure. When he and his co-conspirators convinced at least 10 other federally insured institutions to invest in fraudulent loans to further the scheme, they jeopardized the safety and soundness of those institutions as well. We are committed to continuing our efforts to prosecute such criminal misconduct, help maintain the stability of the Nation’s financial institutions, and ensure the viability of the Deposit Insurance Fund.”

Christy Romero, Acting Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) said, “Despite Conner’s fiduciary duties as president, CEO, and chairman of FirstCity Bank, for years he went to great lengths to lie to bank regulators, cheat the bank, and steal millions of dollars. He then attempted to steal more than $6 million in TARP funding from U.S. taxpayers and Treasury to cover his tracks. It is precisely this type of deception and greed by key bank insiders that contributed to and exacerbated the financial crisis. Fraud in connection with TARP will be aggressively investigated and prosecuted by SIGTARP and its law enforcement partners.”

According to United States Attorney Yates, the charges, and other information presented in court, CONNER served in a variety of top positions at FirstCity Bank between 2004 and 2009, including as vice chairman of the board of directors, as a member of the bank’s loan committee, as president, and later as acting chairman and chief executive officer. While serving in these positions, CONNER conspired with others to defraud FirstCity Bank’s loan committee and Board of Directors into approving multiple multi-million-dollar commercial loans to borrowers who, unbeknownst to FirstCity Bank, were actually purchasing property owned by CONNER or his co-conspirators.

CONNER and his co-conspirators misrepresented the essential nature, terms, and underlying purpose of the loans and falsified documents and information presented to the loan committee and the Board of Directors. CONNER and his co-conspirators caused at least 10 other federally insured banks to invest in, or “participate in” the fraudulent loans based on these and other fraudulent misrepresentations, shifting all or part of the risk of default to the other banks. CONNER alone reaped almost $7 million in proceeds from the loans alleged in the indictment.

In the process of defrauding FirstCity Bank and the “participating” banks, to conceal their unlawful scheme, CONNER and his co-conspirators routinely misled federal and state bank regulators and examiners. They also unsuccessfully sought federal government assistance through the U.S. Treasury Department’s Troubled Asset Relief Program (“TARP”) and engaged in other misconduct in an attempt to avoid seizure by regulators and prevent the discovery of their fraud. In an effort to make FirstCity Bank’s financial position look much better than it really was, they made loans to buyers to purchase property that FirstCity Bank held as a result of foreclosure or similar actions without requiring that such buyers make the required down payments.

With respect to the perjury charge, on January 5, 2011, knowing that he was under federal criminal investigation for his conduct at FirstCity bank, CONNER filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Georgia. Among other misrepresentations and omissions, CONNER’s bankruptcy petition stated that he had a little over $3,000 in cash and financial accounts and essentially no un-encumbered interests in real estate. On February 3, 2011, CONNER falsely testified under oath at a bankruptcy hearing in federal court that, among other things, his bankruptcy petition was true and accurate in all respects and that he was “down to less than nothing” despite having a large liquid reserve several years ago. The investigation showed that in truth, CONNER had and controlled off-shore accounts containing over $545,000 when he swore under oath that he was broke. In addition, CONNER had $4 million in real estate investments from his off-shore accounts (that is, assets of his bankruptcy estate) that were not disclosed in his bankruptcy petition or in his sworn testimony in open court on February 3, 2011.

Today, CONNER tendered a guilty plea to one count of conspiracy to commit bank fraud. He was originally indicted in March 2011, along with FirstCity bank’s former chief loan officer, CLAYTON A. COE, on 12 counts of conspiracy to commit bank fraud, bank fraud, and operating a continuing financial crimes enterprise. The grand jury charged CONNER and COE with additional crimes in a superseding indictment returned in June 2011, which also added FirstCity Bank’s former inside attorney, ROBERT E. MALONEY, Jr., as a new defendant in the case.

United States District Judge Steve C. Jones will determine whether to accept CONNER’s guilty pleas after the preparation of a presentencing report. If Judge Jones accepts CONNER’s guilty pleas, CONNER will be sentenced to 12 years in federal prison on all of the charges, be banned from the banking industry for life, forfeit $7 million and pay significant restitution to the FDIC and victim banks. Sentencing is set for January 31, 2011, at 10 a.m.

CONNER has been in federal custody since March 20, 2011—the two-year anniversary of FirstCity Bank’s failure—when he was arrested by federal agents at Miami International Airport upon his arrival from the Turks and Caicos Islands in the West Indies.

This case is being investigated by special agents of the FDIC, Office of Inspector General; the Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”), the Federal Bureau of Investigation, and Internal Revenue Service-Criminal Investigation.

Assistant United States Attorneys Douglas W. Gilfillan and David M. Chaiken are prosecuting the case.”

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Douglas McNabb – McNabb Associates, P.C.’s
Federal Criminal Defense Attorneys Videos:

Federal Crimes – Be Careful

Federal Crimes – Be Proactive

Federal Crimes – Federal Indictment

Federal Crimes – Detention Hearing

Federal Mail Fraud Crimes

Federal Crimes – Appeal

————————————————————–

To find additional federal criminal news, please read Federal Crimes Watch Daily.

Douglas McNabb and other members of the U.S. law firm practice and write and/or report extensively on matters involving Federal Criminal Defense, INTERPOL Red Notice Removal, International Extradition and OFAC SDN Sanctions Removal.

The author of this blog is Douglas McNabb. Please feel free to contact him directly at mcnabb@mcnabbassociates.com or at one of the offices listed above.