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Capano Pleads Guilty to Bank Fraud in Riverbend Project

According to an announcement by the U.S. Attorney’s office for the District of Delaware, a prominent Delaware developer has pleaded guilty to committing federal crimes during the construction of housing units in South New Castle.

Joseph L. Capano Sr., 73, resident of Middletown, admitted to diverting at least Joseph Capano$146,909.96 in loan proceeds from a line of credit that was meant for the construction of the Riverbend at Old New Castle.

Capano, who is from the well-known and influential Delaware family of businessmen, developers and politicians, submitted a guilty plea to one count charge of bank fraud at the U.S. District Court in Wilmington.

According to court documents, the Riverbend construction work was partly funded by a $1.5 million commercial line of credit made available by Cecil Bank headquartered in Elkton, Maryland.

In October 2007, Capano had signed an agreement for the release of the funds, stating that the line of credit would be used to fund construction and other costs associated with the project, but instead, the funds were diverted to cover personal expenses.

From October 2007 to August 2008, Capano made several false statements and representations in funding requests, otherwise known as draw requests, which he submitted to the bank. In one instance, in a draw request seeking for $300,000 to fund a number of Riverbend Development expenses, Capano received the funds only to use them for his personal expenses, including about $63,000 which went for a jewelry purchase, the court documents said.

This plea agreement only means that the last is yet to be heard concerning the under dealings that  went on in the Riverbend project, which is now embroiled in a bankruptcy fight.

Aside from the bank fraud charge, Capano also pleaded guilty to one count of knowingly violating the Clean Water Act. He had directed employees and contractors of his company to expand an entrance road into the development, and place a water main pipe through protected wetlands, this is against the warnings he received in a cease and desist letter issued by the Army Corps of Engineers.

“It is important to the integrity of the land use and development process that all developers operate under the same set of rules,” David C. Weiss, the acting U.S. Attorney for the District of Delaware, said in a statement. “Mr. Capano was determined to make his own rules, and to use whatever means necessary to get the Riverbend Development completed. In so doing, he lied to the bank about the use of project funds and he ignored federal wetland regulations and the directives of the Army Corps of Engineers. Now he stands as a convicted felon.”

Capano now faces up to 30 years in prison and a fine of $1 million for the bank fraud charge, as well as three years in prison and a $250,000 fine for the Clean Water Act charge.

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Premier Mortgage Co-owner, Lester Soto Sentenced for Fraud

The co-owner of a mortgage company has been sentenced to 21 months in prison for carrying out a large-scale fraud scheme that involved the use of straw buyers to obtain millions of dollars in loans.

Lester Soto, 59, of Freehold, N.J., had previously pleaded guilty to two Department of Justicecounts of conspiring to commit bank fraud before being handed a 21 months prison sentence by U.S. District Judge Esther Salas at the federal high court in Newark, N.J.

From September 2006 to May 2008, Soto used Premier Mortgage Services, a company that he co-owned, to engage in two related mortgage fraud conspiracies that targeted properties in low-income areas of New Jersey using straw buyers, prosecutors said.

Soto and his co-conspirators deceived financial institutions by submitting fraudulent documents in mortgage loan applications, which made it seem as if straw buyers had more assets than they actually did. Relying on this false information, the funds were released for the subject properties.

When the funds were released, Soto and his co-conspirators distributed the money and used fraudulent settlement statements to conceal the sources and destinations of the funds. Since the straw buyers had no means of repaying the loans, most of the houses went into foreclosure proceedings.

Apart from being the part owner of Premier, Soto also acted as the loan officer for some mortgage loan applications and took a percentage of its profits. Besides having people create the fraudulent documents, Soto connected these people with Premier mortgage brokers so that more of the fake documents could be created. He went further to instruct Premier employees to provide him with loan files that were suspected to be fraudulent, and he personally worked to see that they received funding.

Those charged as conspirators include Isaac DePaula, 36, of Brazil; Adilson Silva, 50, of Union, N.J.; Rodrigo Costa, 35, of Brazil; Michael Rumore, 57, of Toms River, N.J.; Antonio Pimenta, 48, of Neshanic Station, N.J.; Klary Arcentales, 47 of Lyndhurst, N.J.; and Linda Cohen, 58, of Orange, N.J.

Arcentales, one of the loan officers who provided fraudulent documents to financial institutions on behalf of straw buyers, was sentenced to 18 months in prison on March 28. Cohen, a paralegal who served as the settlement agent on mortgage loans brokered by Arcentales for various properties, was sentenced to six months in prison on March 30.

In addition to the prison term, Judge Salas ordered Soto to serve five years of supervised release and pay restitution of $3.7 million.

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Gallup’s Job Creation Index at All-Time High in August

By Ravinder Kapur

Gallup’s U.S. Job Creation Index is at +32, indicating that the proportion of employees across the country who think that their employers are in a hiring mode is at its highest level ever. Tracking anticipated job creation was started by Gallup in early 2008, soon after the U.S. economy entered the Great Recession.

The August U.S. Job Creation Index is based on inputs received from 17,500 employees Painteracross all 50 U.S. states and the District of Columbia. The employees, who are a mix of both permanent and temporary, are asked whether their employers plan to recruit staff, maintain it at the current level, or carry out lay-offs.

In August, while 44% of employees surveyed felt that the head-count in their firms would be increased, 12% thought that staff reductions were planned. The Job Creation Index is derived from the difference between these two percentages, and stands at +32, the highest level attained since Gallup began measuring employee perceptions on job creation.

This record level has been maintained since May, which shows that workers are of the view that employment prospects have neither improved nor deteriorated in the last four months.

The Index was at its lowest in early 2009 when it reached a level of -5, indicating that the number of employees anticipating lay-offs exceeded those who thought that their firms were planning to take on staff. Over the last six years the index has climbed steadily to reach its current level. The August survey, conducted between the first and thirty-first of the month, also had 39% of employees holding the view that their firms would neither lay off nor recruit people.

A regional break-up of employee responses reveals that job creation levels were the highest in the Midwest and lowest in the East. Additionally, hiring in the non-government sector was stronger than in the government sector.

While the Job Creation Index is at its peak, its growth seems to have tapered off with the same level being maintained for the last four months. The level of the index in the coming months will reveal whether it has paused before continuing on its uptrend or its remaining at the same level is an indication of a reversal in direction.

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Former Credit Union Officers Plead Guilty to Bank Fraud

By Vijay Daundkar

Tino Ninotti and Jason Anthony, both retired police officers, have pleaded guilty to one count each of conspiracy to commit bank fraud according to the sources. Sentencing will take place on August 17. Ninotti and Anthony were both part of the $38 million Wilkes-Barre City Employees Federal Credit Union. Federal prosecutors dropped bank fraud charges against Tino Ninotti in exchange for the guilty pleas. If Ninotti and Anthony accept the responsibility for their actions, the judge will also recommend a reduced sentence for both of them.

Ninotti fraudulently obtained a $25,086 car loan by using another credit union member’s Jason Anthonyname. The other accomplice Jason Anthony forged an individual’s signature to secure a $7,159 credit union loan according to the federal prosecutors.  They both entered their pleas before U.S. District Judge A. Richard Caputo. They were reminded by the judge that they face maximum of 30 years in prison. Both Ninotti and Anthony also gave up their right to appeal their impending sentences, which their lawyers said they felt was fair.

The prosecutors told the court that city towing contractor Leo A. Glodzik III gave Ninotti a fake vehicle identification number that he provided to the credit union and also forged his brother’s name on the loan application. “Mr. Ninotti had no intention of purchasing the truck, nor did the owner have any intention of selling it,” the Assistant U.S. Attorney Michelle Olshefski told the court.

Magda who allegedly signed a loan document as a witness to a signature of an individual who did not actually sign the documents according to the Federal prosecutors, has pleaded not guilty to bank fraud and conspiracy to commit bank fraud charges. She is also believed to be aware of the fact that co-defendant Jason Anthony had forged the individual’s signature to obtain a $7,159 credit union loan. Both Glodzik and Magda will stand trial on June 15, according to court documents.

“Regardless of sentence, (Anthony) has said he would accept whatever sentence is handed down,” his lawyer Joseph Nocito said. Both Ninotti and Anthony will also be required to submit to interviews and testifying before future grand juries and in trial. “Mr. Ninotti has cooperated from the very beginning of the investigation and he intends to follow through with that cooperation,” his attorney, Demetrius Fannick said.


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Lawyer & Con Man Attempt Fraud Posing to Buy Maxim

By Vijay Daundkar

Federal authorities arrested Harvey Newkirk, a 39-year-old attorney and New Rochelle resident on Wednesday for his alleged involvement in a scheme to fraudulently raise millions of dollars to buy the provocative men’s magazine “Maxim”. The magazine is known for scantily clothed female models, singers and actresses. He is charged with conspiring to help a convicted con man Calvin Darden Jr., fraudulently borrow millions of dollars. He was later released on $500,000 bail after he appeared in Manhattan District Court on Wednesday.

Newkirk is charged with wire fraud conspiracy, wire fraud and aggravated identity littleman15_grntheft.  Newkirk conspired with Darden Jr. to use the name of his successful father, Calvin Sr., a retired UPS Inc. executive to persuade two lenders to provide a total of $8 million. According to the prosecutors, Calvin Darden Jr. impersonated his father in an elaborate fraud to bankroll the purchase of the magazine. They are also accused of trying to convince a third investor to contribute $20 million.

Newkirk’s lawyer, Priya Chaudhry, said that her client is a “brilliant and well-respected attorney with an unblemished reputation. He has done nothing wrong, and we look forward to challenging the government’s overreaching and baseless allegations,” CBS New York quoted her as saying.

Darden was accused of using false documents and “spoofed” emails in the alleged scam by a prosecutor. He sent forged documents in his emails, also made false representations about his father’s assets in order to convince others to use money towards the purchase of Maxim magazine. Darden’s father, Calvin Sr., is a also the chairman of Darden Media and a board member of Target Corp., Coca-Cola Enterprises Inc., and Cardinal Health Inc.,

According to the complaint filed by the agent, Darden’s father denied the charge that he was Newkirk’s client, although Newkirk had claimed the opposite in an interview with the investigators. He had similar claims in several representations made by him to various lenders as he tried to secure the magazine deal. Secret Service agent Paul B. Deal also said further that Newkirk had accepted the fact in an interview with investigators that Darden’s father was not his client.

Darden had pleaded guilty in a scam that cost investors dearly a decade ago. He was sentenced to four to 12 years in prison and ordered to repay nearly $6 million.

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Charles Green speaking to Southeastern Inventors Association 12-13-14

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Torrey Pines Bank Names New Regional President

By Joyce Dimaculangan

Torrey Pines Bank announced the hiring of Fred Voss as Regional President of the San Francisco Bay Area market. In his new role, he will be responsible for growing the Bank’s market share in the Bay Area. He will also head area teams in meeting the commercial banking needs of business owners, real estate investors and professionals. He will be based in Torrey Pines Bank’s Oakland location.

Voss brings 25 years of experience in the banking industry. Before joining Torrey Pines Fred Voss Torrey Pines BankBank, he served as Senior Vice President/Team Leader Commercial Lending at a private bank and wealth management company in California. He also held various senior level positions in business banking, commercial lending, and relationship development from large institutions and community banks.

“Given his proven track record focusing on teamwork and working closely with local businesses to provide added value, Fred Voss shares the values of Torrey Pines Bank,” commented Gary Cady, CEO of the Bank. He added that Voss’ can-do attitude will be beneficial to the Bank’s Oakland and Los Altos offices in helping area organizations grow their businesses.

Voss earned a Bachelor of Arts degree in Economics and Business from the University of California in Los Angeles.

About Torrey Pines Bank

Torrey Pines Bank is a California commercial bank with the capacity to keep local business thriving. With California’s diverse economic and business environments, the bank is able to offer services to meet the unique challenges and opportunities faced by local entrepreneurs. Founded in 2003, Torrey Pines Bank provides customers direct access to experts who can help grow their businesses and the local economy as well. To learn more, go to

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First Niagara Names VP/MM Equipment Finance

By Joyce Dimaculangan

First Niagara Financial Group, Inc. announced the appointment of Nicholas Sentementes as Vice President of Middle Market Equipment Finance. In this capacity, Sentementes is in charge of equipment leasing sale originations and product management for the Tri-State and New England regions. He will report directly to David Lempko, Senior Vice President of Equipment Finance for First Niagara.

Sentementes brings 15 years of commercial and middle market experience which will Nicholas Sentementes First Niagara Financial Groupbenefit First Niagara’s Middle Market customers. Lempko looks forward to having Sentementes on board. According to Lempko, “In his previous roles, he built extensive knowledge, experience and relationships in equipment financing industries, including manufacturing, healthcare and retail.”

Asked about this latest development in his career, Sentementes said, “I look forward to using my years of experience to offer First Niagara’s customers financial solutions that are right for them to grow their businesses.” He added, “I am excited to start this next chapter, and to begin contributing to First Niagara’s talented Equipment Finance team.”

Prior to First Niagara, Sentementes worked with People’s United Bank as a Senior Commercial Loan Officer and Relationship Manager. In addition, he held several key positions at Citibank and GE Capital.

Sentementes earned both his MBA and bachelor’s degree in Finance from the University of Connecticut School of Business.

About First Niagara Financial Group
First Niagara Financial Group, Inc. operates as the bank holding company for First Niagara Bank, N.A. providing retail and commercial banking, and other financial services to individuals, families, and businesses. It is a multi-state community-oriented bank with approximately 410 branches, $38 billion in assets, $28 billion in deposits, and approximately 5,800 employees providing financial services to individuals, families and businesses across New York, Pennsylvania, Connecticut and Massachusetts. For more information, go to

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Is Your Small Business Prepared Should You Die?

Planning for the future is just good business. You sign a long-term office lease, you borrow to buy a car or truck, and you ask your vendors to take payment next month for products delivered today. You honestly expect to make good on these obligations. Likewise, your spouse, family, business partners, bankers, employees, customers, and shareholders are all counting on you to honor all kinds of future obligations.

But what happens if a business owner runs out of future? When a business owner dies, the company can collapse into a giant mess, leaving loved ones struggling to hold up a house of cards.

If you’re thinking, “No problem, I’m insured,” think again. Life insurance is great, but the problem is not just the money. The real problem is one of control and transition. If you die, and your spouse (or other heirs) inherits your ownership, can they run the company? Do they even want to? Do your partners, employees, and customers want to work with them? Like it or not, your death would force together people who may be complete strangers with no particular interest or skill to make things better for each other.

After your (always untimely) death, your family and your business would both be better off if there is a way for them to each continue, separately. To make sure this happens, you need more than just a life insurance policy. You need a clear written agreement between all stakeholders: partners, key employees, stockholders, and, yes, your spouse or heir.

Every stakeholder should understand and sign what is called a buy-sell agreement. With that in place, the business continuity is more certain. Yes, your spouse still inherits your stock or ownership. But the buy-sell policy ensures that the remaining partners or owners use the proceeds from your life insurance policy to buy that ownership from your spouse.

Your family gets cash while your partners or employees get the company. It can be just that simple.

Now let’s look at life insurance again. A good buy-sell agreement relies on two separate life policies, both of which pay the company a substantial amount upon your death:

  • A “key man” policy pays the company enough to get through your sudden departure and hire a qualified replacement. Consider this to be at least equal to one year’s salary. If your company has substantial debt, raise the death benefit to cover it.
  • A “buy-sell” policy that pays the company enough to purchase your ownership back from your heirs should at least match the actual value of your business.

The key man policy keeps your business running. The buy-sell policy can get your family the money they need to be set for life, or at least get paid for all your hard work to date.

To get a proper buy-sell agreement (and insurance policies) in place, follow these four steps:

  1. First, speak with your accountant. Calculate how much the company would need to keep going (or, in the worst case, to wind down smoothly and pay all debts).
  2. Next, speak with your banker. If you have personally guaranteed any loans, or if your other corporate debt relies on your personal participation in the business, discuss how the business would pay this back upon your death. It is likely that these terms are already part and parcel of your loan documents; take a close look.
  3. Now look inside the company. Who would want to own and operate the company when you are gone? Is it a current stockholder or a key employee? Get those people involved in the discussion.
  4. When you have a workable plan, speak with an attorney to draw up the agreement. At this stage it’s important to have an insurance agent and all your key stakeholders involved. A buy-sell agreement should be signed by everyone involved, including your spouse and the spouse of any other key player, in some cases. Follow the attorney’s advice carefully; you won’t be able to renegotiate this when you are gone.
  5. Finally, once everyone who will survive you agrees on what happens next, make several copies of the document and keep them safe.

Remember: It’s your duty to make sure that your current business obligations don’t hamper those you leave behind. To protect your family and friends, don’t put off these important preparations.


David Worrell is founder and chief executive at AmeriStart, and he also writes a blog here on about small business money issues.

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