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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JP Morgan Investment Adviser Indicted for $20 Million Fraud

By Ogozi John

According to a release by the office of the U.S. Attorney for the Southern District of New York, an investment adviser, while working at JP Morgan Chase, has been charged in a scheme that defrauded his clients of more than $20 million.

Michael Oppenheim, 48, of Livingston, NJ, is facing charges of wire fraud, investment JPMorgan Chaseadviser fraud, investment fraud and embezzlement. The federal Securities and Exchange Commission have also brought civil charges against Oppenheim.

In a statement, U.S. Attorney Preet Bharara said that Oppenheim sustained this fraud scheme for four years, starting in March 2011 until last month when it was discovered and he was fired from his job. He lied and misappropriated about $20 million belonging to at least seven clients, using their money to finance his home loan, fund his online trading and to pay for other personal expenses.

Oppenheim allegedly told the clients that the funds were being invested in low-risk municipal bonds when he had actually deposited the money into bank accounts that he controlled. Authorities said he also withdrew the money without informing the clients and he then engaged in creating counterfeit documents in order to conceal the fraud.

Oppenheim, who is now being held on a $1 million bail, is facing several decades in prison and more than $5 million in fines, if found guilty of the alleged crimes.

Oppenheim’s attorney, Richard Gamburg said his client will be filing a not guilty plea and that he expects him to be released soon.

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Bucks County Realtor Indicted on Bank Fraud Charges

By Ogozi John

A real estate investor in Bucks County has been indicted by federal prosecutors for his role in a mortgage fraud scheme that involved banks in Philadelphia. Dean Rossi, 49, of Warrington, Pa., according to the unsealed indictment, is charged with mail fraud affecting a financial institution, bank fraud and conspiracy.

Rossi owned a several low-income residential properties in the Philadelphia area FBI Sealthrough several holding companies that he registered under different names, including R & S Real Estate and HB Holding Co. He used proceeds of bank loans for purchasing and refinancing these properties with the expectation that the loans would be repaid after prior mortgages and tax liens were settled.

But instead, Rossi conspired with other real estate and insurance agents to divert the loans, and in all, a total of $643,000 was allegedly misappropriated, according to the indictment.

In order to conceal the fraud, Rossi and others are alleged to have caused payments on the existing mortgages to continue years after the loans were supposed to have been fully paid.

Rossi who has been a realtor for several years is alleged to have maintained this scheme since 2006, defrauding several banks that included Leesport Bank and the now-defunct Nova Bank based in Berwyn, Philadelphia.

Investigations by the U.S. Postal Inspection Service and the FBI led to Rossi’s arrest and the subsequent charges brought up against him. At least two of his conspirators are now facing separate charges in connection to the case.

If convicted, Rossi faces a sentence of up to four years imprisonment and about $4 million in fines.



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Four Convicted in $1.6 Million Luxury Automobile Loan Fraud Scheme

By Vijay Daundkar

Precious W. House, 47, of Chicago was convicted of five counts of bank fraud along with three others in a $1.6 million scheme that involved dozens of fraudulent loans for luxury cars. The trial took place before U.S. District Judge Andrea R. Wood the statement from the U.S. Attorney’s office said. The U.S Attorney’s office further said that House owns two wholesale auto dealerships; Rolling Auto Inc. in Plymouth, IN., and Xpress Automotives in Chicago.

The president of Hughes Corporation Consulting, Brian K. Hughes, 41, was also sbfisigns19convicted of four counts of bank fraud and one count of making false statements on a loan application. According to the prosecutors, House and Hughes agreed to find loans for people in exchange for a 20 to 30 percent fee. They submitted false statements about the applicants’ incomes, employment, credit history and other details. The pair obtained 36 out of the 51 loans they sought. None of the applicants had any intention of buying luxury cars like BMWs, Jaguars, Porsches and other high-end cars from House’s dealership.

Hughes threatened of civil lawsuits or criminal charges against the applicants if they refused to cash the loan checks. The proceeds were then deposited in the bank accounts in Illinois, California and Georgia, which were controlled by House. The defendants obtained $1.12 million using fraudulent means out which $850,000 were obtained from credit union lenders. They had actually sought $1.6 million in loans in total.

Both House and Hughes will appear for a sentencing hearing in June. Two remaining defendents, 46 year old Keith Foster of Harvey and Crystal Williams, 31 of Georgia pleaded guilty before the case went to trial according to the U.S. Attorney’s office. Foster pleaded guilty to making false statements on a loan application and was sentenced to one year in prison and Williams admitted to one count of bank fraud and is awaiting sentencing.

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CFO Indicted in Multi-Million-Dollar Bank Fraud Case

By Vijay Daundkar

Steven D. Griffin, 59, of Berlin, New Hampshire, was charged in a nine-count indictment including making false statements to a financial institution, the United States Attorney for the District of Vermont announced in a statement. Griffin pled not guilty to the charges when he appeared before Chief U.S. District Judge Christina Reiss in Burlington on April 6. He was later released on conditions pending trial.

Isaacson Structural Steel, Inc. (ISSI), which Griffin partly owned, was one of the Isaacson Structural Steel Inc  (ISSI)largest businesses in the North Country of New Hampshire. He was also the Chief Financial Officer of the company. ISSI fabricated steel for commercial constructions and then transported it to building sites. ISSI also had subcontracted services, including erection of the steel.

Griffin made false claims and inflated the assets of the company  between 2007 and 2011 to the Passumpsic Saving Bank and other participating banks to secure loans totaling $12 million, which included $2 million loan guaranteed by the Small Business Administration in 2010. The banks lost millions of dollars when the assets of the bank were liquidated following its bankruptcy in 2011.

Arnold Hanson, the former Chief Executive Officer of ISSI, who is also part owner of the company pleaded guilty to conspiring to make false statements to financial institutions. He will be sentenced on May 27, 2015. Griffin’s sentence will be a maximum of 30 years of imprisonment and a $1 million fine on each count, if convicted.

Assistant U.S. Attorneys Paul J. Van de Graaf and Timothy C. Doherty, Jr represented the United States, whereas, Paul S. Volk of the Burlington law firm, Blodgett, Watts & Volk represented Griffin in court. The Federal Bureau of Investigation, the Office of Inspector General for the Federal Deposit Insurance Corp., and the Office of Inspector for the Small Business Administration are conducting the ongoing investigation.

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Florida Man Colludes With Bank Employees to Defraud Bank

By Vijay Daundkar

Florida man Albert Solaroli who was indicted in 2013 for bank fraud related to a $1.5 million loan he received from One Bank & Trust of Little Rock, pleaded guilty to laundering $120,000 to avoid prosecution in a pending bank fraud case. His plea was heard by U.S. District Judge Brian S. Miller. He had a plea deal with the U.S. Attorney’s Office in Little Rock in which he pleaded guilty to the charge in exchange for having the bank fraud charge dismissed.

Christopher Thyer, U.S. Attorney said in a press release that “Deceiving banks alberto-solaroli-668through fraudulent pretenses ends up hurting our entire banking industry. We are committed to investigating and prosecuting those who take advantage of the good will of bank depositors.”

He made a false claim on the loan application that his net worth was almost $170 million when he received the loan from One Bank in April 2007. He later admitted that it was a false claim. According to the plea agreement, he’s been held responsible only for the amount of $120,000 for sentencing and restitution purpose, though the charge filed by federal prosecutors refers to the $1.5 million that he received and didn’t repay.

If he was held responsible for the total amount of $1.5 million that he received from the bank, the guideline sentence would have been 37-46 months but the terms of his plea deal talks about a guideline sentence of 12-18 months. He might even be sentenced to probation instead of prison because of the short tenure of the sentence. Solaroli was represented in the court by Omar Greene of Little Rock. Sentencing date has not been announced yet.

Four former executives of the bank who helped hide the loan problem from regulators as soon as it went bad are also awaiting trial. Former EVP Gary Rickenbach allegedly invested in Solaroli’s company a few weeks before approving the loan.

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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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