Category Archives: Rap Sheet

Six Years for Fraudulent Conversion of $2 Million Collateral

By Vijay Daundkar

Richard Thomas Gregg, a Springfield, IL businessman, was sentenced to six-and-a-half years in prison as part of an agreement after pleading guilty in federal court to one count of bank fraud and one count of bankruptcy fraud. He will also have to pay $3.1 million in compensation to the victims of his fraud schemes.

One of the pending counts involved 1717 Marketplace at 1717 S. Range Line Road, Scales of Justicewhich he developed with his son. Gregg, 59, was the principal shareholder and a director of Southwest Community Bank, which closed in May, 2010. Southwest Community Bank lost $679,399 on Gregg’s personal line of credit and $871,125 in a commercial real estate fraud scheme perpetrated by Gregg, for a total loss of $1,550,524.

Gregg admitted on the factual basis to his plea agreement that “the government could prove he substantially jeopardized the soundness of that financial institution and directly contributed to the failure of the bank.”

He defrauded Great Southern Bank by selling the collateral securing a $2 million loan, and keeping the proceeds. He used 160,000 shares of stock for First Bancshares, Inc. (FBSI), the holding company for First Homes Savings Bank, as collateral to borrow $2 million from the Springfield bank.

He had obtained the securities under the custody and control of Great Southern Bank by means of false and fraudulent pretenses, representations and promises. The bank subsequently consolidated several of his outstanding loans in order to cover the missing collateral as a result of his fraud. Later the bank was forced to charge off $2,316,264 on this consolidated loan. The actual value of the FBSI shares was determined to be only $1,350,400, Gregg’s conversion of which was fraudulent.

Gregg filed a personal bankruptcy petition in March, 2013 containing numerous false declarations and concealed fraudulent transfers of property while he was already under indictment for bankruptcy fraud relating to the bankruptcy petition of his corporation, 1717 Market Place, LLC.

Gregg was also a real estate developer, an investor and a licensed insurance agent for the Shelter Mutual Insurance Company and had ownership interest in and controlled a number of business entities. Gregg and his wife were also principal stakeholders in Glasgow Savings Bank, which failed in 2012. It was one of the oldest banks west of the Mississippi River prior to its failure.

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Man Pleads Guilty for Stolen Valor and Bank Fraud

By Ogozi John

A man who lied to banks that he served in the Marine Corps and used counterfeit military paperwork to secure loans from banks, has pleaded guilty to charges of stolen valor and bank fraud.

While applying for a loan in 2004, Charles Bailey told the Newburyport Five Cent Savings Combat RibbonsBank that he had served with the Marine Corps in Afghanistan and Iraq for nine years, and received a Silver Star, a Purple Heart and a Combat Action Ribbon.

Also, he submitted a Photoshopped military document to convince the bank that the derogatory information on his credit report was illegally accrued by his ex-wife while he was serving overseas.

Newburyport Five Cent Savings Bank issued three loans totaling $300,000 to Bailey and made a public announcement stating that the loans were part of their support for the local community.

It was after this announcement that the bank got a call from Kennebunk Savings Bank informing them that Bailey had previously submitted what they suspected to be a fraudulent loan application with their bank. This prompted an investigation by Newburyport Savings Bank which uncovered a lot of false information.

A farm equipment dealer named as Atlas Tractor that sold farm equipment to Bailey, was actually a shell company owned by Bailey himself and he even used fake John Deere serial numbers. All the proceeds from the purported sales went back into his pockets. Also, when the bank did a Google earth search for his farm, it brought up images of a vacant lot.

Bailey also applied for an SBA loan from Citizen’s Bank which was refused after they discovered that the letter of good standing from the secretary of state’s office that he had submitted was actually forged. Together with a letter from Equifax stating that the derogatory information on his credit report was not his responsibility, which was also found to be a counterfeit.

Bailey used these military lies and fake letters for years, including a reported case in 2013, where after obtaining a loan from Farm Credit East that later became delinquent, he lied that he was facing hardship due to the critical health condition of his wife and son and was expecting to get financial support from the military’s Family Emergency Services, Camp Pendleton. He also submitted a counterfeit letter using the US Marine Corps letter head stating that he was being called to active duty.

“Gunnery Sergeant Christopher Bailey, 1st Marine Special Operations Battalion (Forward), 1st Group, Senior Forward Combat Operator, was ordered to report to Marine Special Operations Training Battalion, Camp Pendleton for “pre-deployment condition and proficiency training on October 7, 2013, at 0500 hours local time,” the forged letter stated.

Bailey now faces up to 30 years in prison and is expected to pay millions of dollars in fines.

 

 

 

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Former Bank President Sued Over Loan Default

By Vijay Daundkar

Former Arvest Bank president Dennis Smiley resigned his position on March 13 and was recently sued by Delta Trust & Bank, in Benton County, over a personal loan default. Smiley is currently doing business as HDS Holdings, LLC. Smiley already faces loan fraud charges that claim that one of the loan payments did not clear his bank account, which led to his resignation.

Over the past four years, he has approached many banks for loans, and it has been alleged Dennis Smileythat in each case, he pledged the same restricted Arvest Bank shares as collateral for the loans. The total borrowing has totaled over $4.5 million since 2009 from more than a dozen Arkansas banks. The claims have been supported by the Uniform Commercial Code filings with Arkansas Security of State.

Smiley pledged 4,264 shares of Arvest Bank stock for collateral while taking a loan of $245,126 for HDS Holdings from Delta Trust & Bank. Smiley was not able to make the first installment on March 20 according to the lawsuit.

The complaint states that “The defendants have confessed that they are either unable or unwilling to pay the obligations to the lender. The defendants have caused the collateral to be substantially impaired and they are in non-monetary default under the express terms of the note and security agreement and guarantee.” The bank has asked for a judgment in the amount of $245,126, along with accrued interest until the debt is paid.

Co-defendant Henry Dennis Sr. was not willing to talk about his son’s legal and financial problems. He is the chairman of First State Bank of De Queen, AR, and also on the list of banks involved in the federal fraud probe.

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Bank Manager Arrested for Embezzling $22,000

By Ogozi John

The former branch manager of the United Bank in Fayetteville has been arrested for embezzling $22,000 from the bank’s accounts.

According to jail records, Connie P. Jordan, 42, of Fayetteville, AR, was arrested and will Connie Jordanbe facing charges of embezzlement and theft of property.

United Bank first discovered that money was missing from their accounts after they carried out an internal audit. All the missing funds were further traced down to Jordan, and she was promptly relieved of her job as branch manager, before a report was filed with the Fayetteville Police Department which then led to her arrest.

According to police reports, Jordan admitted to have embezzled the missing money while speaking in a phone conversation with the bank representatives. The report stated that she “knowingly and willfully [concealed] the fact that money was missing by transferring the missing amount into various locations in the bank when audits were performed.” She then concealed the stolen funds by deleting the transfer records after the audit had been conducted.

In a phone call with bank representatives, Jordan said she has been carrying out the fraudulent transfers for years in order to pay back $25,000 that she had mistakenly lost in a transaction error.

But the police said she even went beyond paying for her error, and was also taking money for personal purposes. “Bank records were obtained that showed the amount of money Jordan was hiding by transferring and deleting had increased over the years. This indicated that Jordan was not simply paying back a missing amount of money from the bank but taking it,” the police report stated.

Jordan has now been released on a bond and is scheduled for trial on May 4.

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Mortgage Company President Pleads Guilty to Bank Fraud

By Ogozi John

The president of Castle Mortgage based in Florida has pleaded guilty in federal court to his crime of conspiring with others to defraud a bank in a $2.4 million property loan deal.

Joseph W. Nocito Jr., 44, of Edgeworth, pleaded guilty before U.S. District Joseph NocitoJudge Arthur Schwabon, of bank fraud conspiracy and filing a false tax return.

According to a statement from Assistant U.S. Attorney Mary Houghton, Nocito was the childhood friend of a man identified as a conspirator and owner of Sosso Homes LLC in Sarasota, FL., and in 2005 this man bought a house in Longboat Key, FL., with the intention to renovate and resell the property.

But when he was unable to find a buyer after two years, and was also unable to make payments on a $1.62 million loan he had collected from Liberty Savings Bank, he offered the property to Nocito who then agreed to buy the house using a mortgage from Washington Mutual Bank.

Before the sale was made, his friend’s brother who was also the owner of a realty company and a title company, made false evaluations of the value of the house so that  they could present it to the bank that Nocito was paying $3.5 million for the property, and was making a $600,000 down payment.

“Mr. Nocito never paid nor intended to pay the very large down payment. In fact, the other conspirators kicked back about $458,000 to reward Nocito for his role in the conspiracy,” Houghton said.

Nocito failed to report the kick-back as income while filing his 2007 tax returns, and so underpaid his taxes by about $155,000.

Eventually, when Nocito defaulted on the mortgage loan payments, and the Washington Mutual Bank suffered losses of over $1.8 million.

During court proceedings, Nocito remained silent, refusing even to answer questions asked by the judge. His attorney, Mark Rush said that Nocito is cooperating fully with ongoing government investigations as he wants to resolve the case and get back to his life.

As part of the plea agreement, Nocito will pay restitution to the bank and the Internal Revenue Service. He faces up to four years in prison with sentencing scheduled for October 15.

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Credit Union Executive Indicted in Fraud Scheme

By Ogozi John

A federal grand jury in Ohio has indicted the former loan officer of the defunct Taupa Lithuanian Credit Union for his role in scheme that defrauded the union of over $400,000.

According to the indictment, Andrew Belzinskas, 45, of Lyndhurst, engaged Taupa Lithuanian Credit Unionin cash transactions, issued checks and made payments which he knew were far above what he had in his personal account. And in trying to cover up his account overdrafts, he conspired with the former CEO of the union, Alex Spirikaitis, to make multiple transfers from the union’s account.

This scheme was sustained from 2007 to 2013, and during this period, Spirikitis had helped to cover up a total of $436,026 in overdrafts made by Belzinskas, and all these transactions were done without submitting a credit or loan application.

Belzinskas served as the full-time loan officer of the credit union for more than a decade, from 1991 to 2004, and after that period, he was still being retained to work as a part-time loan officer. Taupa served most Lithuanian residents in the greater Cleveland area with more than 1,150 members.

In 2013, the National Credit Union Administration and the Ohio Department of Commerce took possession of Taupa Lithuanian Credit Union and placed it under receivership due to its insolvency.

Investigations into the case are still ongoing according to the U.S. attorney’s office, and Belzinskas is among seven others who are facing charges relating to the credit union’s collapse.

Former CEO, Alex Spirikaitis has been sentenced to 10 years in prison for his role in the scheme.

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Former Bank President Pleads Guilty in Bank Fraud Scheme

By Ogozi John

The former president of Premier Community Bank of the Emerald Coast has pleaded guilty to his role in a long-running bank fraud scheme.

Michael ‘Sean’ Davies, 43, of Crestview, FL., was indicted by a grand jury last Premier Community Bank of the Emerald Coastyear  and he has now admitted to charges of money laundering, conspiracy to commit bank and mail fraud, making false statements to a federally insured institution and fraudulently benefiting from a loan by a federally insured institution.

According to a release by the U.S. Department of Justice, Davis carried out a scheme that involved using a “straw buyer” to submit fake documents in order to buy existing properties through the short sales from Bank of America. The buyer then purportedly sold the properties in the same day to third parties.

The third parties got funds to finance the purchase of these properties using loans approved by Davies at the Premier Community Bank.

Davis sustained this scheme for five years, from January 2006 to January 2011, and made $297,408, using his own company, MSD Investments. He also discharged $743,425 in personal mortgage loan debt owed to Bank of America, the release said.

The scheme affected three banks; Premier Community Bank, Bank of America and Beach Community Bank, who all reported losses totaling hundreds of thousands of dollars.

The Internal Revenue Service, the Federal Deposit Insurance Corporation’s Office of the Inspector General and the United States Treasury Department Office were all involved in the investigations leading to these charges, the release said.

Chief United States District Judge M. Casey Rodgers has scheduled sentencing on the case for May 28.

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Sacramento Realtor Indicted for $2M Bank Fraud

By Ogozi John

A Sacramento Realtor has been indicted by a federal grand jury on eight counts of bank fraud for allegedly securing home loans for buyers who were unqualified based on their actual income.

According to the indictment, Gabriela “Gabby” Carter, 43, used Gabby Carter Dean Adams Real Estateher status as a licensed real estate salesperson to submit fraudulent loan applications to banks.

These applications made in 2007 and 2008, involved eight mortgages with funding totaling $2 million obtained from Wells Fargo Bank and Washington Mutual Bank. At the time, Carter was employed as a salesperson at Synergy Real Estate and was a principal at the mortgage broking firm, 1st American Pacific.

A release from the office of the U.S. attorney for the Eastern District of California states how Carter falsely represented her clients’ income by using false W-2 forms and pay stubs for various shell companies that were actually not their employers.

Property records shows that six out of the eight properties went into foreclosure about two years after the fraudulent transactions were made.

Carter, a native of Costa Rica, had mostly low-income clients who were immigrants and spoke only Spanish, and so were apparently unaware of the fraudulent transactions. Therefore, it is unlikely that her clients, who bought those properties, will face any legal charges.

Carter, who is currently employed as a salesperson for Dean Adams Residential Real Estate with two active listings according to the MetroList MLS, faces up to 30 years in prison if found guilty of all the charges, and prosecutors will also attempt to seize any of her assets obtained from the fraud.

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Bankers Sentenced for Identity Theft

By Ogozi John

The leader of  an identity theft ring in Dallas has been sentenced to 16 years in federal prison by U.S. District Judge Sam A. Lindsay.

Anthony Minor, 28, of Cedar Hill was convicted on a one count charge of conspiracy to littleman10_grncommit bank fraud, five counts of bank fraud, one count of using or trafficking in an unauthorized access device and two counts of aggravated identity theft, as announced by the acting U.S. attorney for the Northern District of Texas John Parker.

According to evidence presented in court, Minor had devised various means of stealing identities, including direct purchase of identities from a group of safe robbers and getting them through Katrina Thomas, an employee of the Federal National Mortgage Association (Fannie Mae) who he recruited to join the scheme and used to steal more than 1,000 identities from her Fannie Mae workstation. He also had recruits who walked into the banks to make cash withdrawals after working with his girlfriend Tilisha Morrison, to do account take-overs and gaining full access to the bank account of their victims.

On the day he was arrested, law enforcement caught Minor at the W Hotel in Dallas with several fake IDs, counterfeit checks, a laptop that contained a template of the Texas Department of Public Safety Temporary Drivers’ License, a printer and a $900 bottle of Dom Pérignon Champagne he had just ordered from room service using one of the stolen credit cards. Even the hotel room was rented with another person’s identification details.

Minor is the last defendant to be convicted in connection to the identity theft conspiracy. Others include Tilisha Morrison, 25, of Dallas, Katrina Thomas, 41, of Garland, who were both sentenced to 48 months in federal prison and were also ordered to pay restitution of $88,131 and $76,831, respectively.

In addition, Kario Butler, 29, of Mansfield, Cyrus Pritchett, 25, and Jamilah Karriem, 21, both of Dallas, have all been sentenced to serve prison terms for their roles in the scheme. One defendant, Karen Mendora, 44, of Dallas, is still at large.

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Three Indicted for Bank Fraud and Money Laundering

By Ogozi John

Three people who allegedly took part in the a scheme to defraud banks and the U.S. Department of Agriculture (USDA) have been indicted on charges of fraud and money laundering.

According to an announcement from the office of Deirdre Daly, U.S. attorney for USDAConnecticut, Pablo Calderon, 59, of Darien, Brett C. Lillemoe, 45, and Sarah Zirbes, 39, both of Minneapolis, all took part in the scheme to defraud the USDA and U.S. banks including Deutsche Bank and Colorado-based CoBank.

They did this by misusing funds from the Export Credit Guarantee Program of the USDA, which were meant for financing commercial exports of agricultural products by issuing credits from U.S. financial institutions to foreign banks with the loans guaranteed by the USDA.

Calderon, Lillemoe, and Zirbes created false businesses with fake names and bank accounts and used them to obtain huge amounts of amounts of capital funding from U.S. banks which they then gave to foreign banks, and profited by collecting percentage fees running into millions of dollars.

Lillemoe even entered into an agreement with foreign banks, including the International Industrial Bank of Russia, and she received letters of credit from the banks which were then used to obtain loans from U.S. banks.

Most of these foreign banks failed to repay the loans and the USDA spent over $10 million in fulfilling their loan guarantees.

The accused persons also falsified shipping documents for the shipment of agricultural goods that were not actually shipped. They even had fake “commercial invoices” showing the sales of agricultural commodities.

Each defendant in the case is charged with one count of; conspiracy to commit wire fraud and bank fraud, bank fraud, and money laundering, and multiple counts of wire fraud.

Calderon faces a separate charge of making false statements to federal law enforcement.

They each face a maximum of 50 years in prison if found guilty of the charges.

 

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