Letter of Apology » Bank Fraud

White Collar World…..

Solomon Wisenberg — Mon, 20 Jul 2009 14:06:53 +0000

The Washington Post editorializes here for a compromise in the U.S.-Switzerland cold war over UBS’ reluctance to release more names of purported American tax cheats to IRS and DOJ. I understand the Swiss position. It’s tough to be a grown up nation in the 21st Century when a key segment of your economy is devoted to facilitating tax fraud…..Andrew Cuomo is talking to Chuck but in a nasty way, according to this WSJ article. In a Friday letter, the New York AG threatened to sue Charles Schwab & Co. for fraud in connection with its marketing of auction-rate securities. Cuomo is open to a settlement, however, if Schwab buys back the securities from its investor clients. Schwab adamantly denies wrongdoing. Cuomo’s letter provides examples, allegedly supporting his fraud theory. They look pretty weak to me. Let’s see if Andy is as tough on recently departed Auto Task force Chief, and Democratic Party mega-money raiser, Steven Rattner. Fox News reported on his departure, here, last week…..Meanwhile, in the surprise of the century, Neil Barofsky, “the special inspector general overseeing the government’s financial rescue program,” reports that many of the banks receiving TARP money have used those funds for things other than lending! The uses include, investing, repaying debt, and buying other banks. About 80% of the banks spent at least some of their TARP funds in connection with new lending. Barofsky’s report comes out today, according to this Washington Post article. I have an idea to increase employment and reduce waste and fraud. Every company should be required to hire its own special inspector general at inception. Then, after the first special inspector general’s report is issued, the company should be forced to fire the special inspector general on trumped-up charges. We can keep a lot of people employed this way, and generate plenty of news stories about waste and abuse. We should also make every person hire a special inspector general at birth. Then we can ignore virtually every warning the special inspector general gives us and later suffer the consequences. Oh wait–I’ve already done that with Mom and Dad.

Renzi Co-Defendant Sandlin Gets Three Year Prison Sentence In Texas Case

Dave Westheimer — Thu, 27 Nov 2008 07:03:01 +0000

In Sherman, Texas on Tuesday, US District Judge Richard Schell sentenced James Sandlin of Sherman to three years in prison in a bank fraud case. A jury convicted Sandlin in June on two counts of submitting a false statement to a federally insured financial institution (earlier); the indictment charged that he failed to disclose a $996,000 debt on financial statements he submitted to a Sherman bank (DOJ, AP).

Sandlin is former business associate of US Rep. Rick Renzi (R-Ariz.) and was indicted with Renzi in February in a different case (earlier).

More Charges In Rubashkin, Agriprocessors Case

Dave Westheimer — Mon, 24 Nov 2008 06:00:35 +0000

A superseding federal indictment unsealed on Friday afternoon includes the previous immigration and bank fraud charges against former Agriprocesssors CEO Sholom Rubashkin and adds new counts. Rubashkin now faces charges of conspiracy to harbor undocumented aliens for profit, harboring undocumented aliens for profit, conspiracy to commit document fraud, aiding and abetting document fraud, six counts of aiding and abetting aggravated identity theft, and two counts of bank fraud.

Also named are the corporation and four other management team members: Brent Beebe, Hosam Amara, Zeev Levi and Karina Freund. Amara and Levi are believed to have fled to Israel after the May immigration raid at the Postville, Iowa kosher meat processing plant. Amara and Freund were named in an earlier indictment. The Iowa Independent has a full listing of the charges and background.

Rubashkin Denied Bond On Bank Fraud Charges; Tension High In Town

Dave Westheimer — Fri, 21 Nov 2008 05:17:11 +0000

After a Wednesday bond hearing in Cedar Rapids, Iowa, US Magistrate Judge Jon Scoles ruled on Thursday that former Agriprocessors CEO Sholom Rubashkin must remain in federal custody pending his trial on bank fraud charges. Scoles ruled that Rubashkin is a serious flight risk, citing substantial evidence against Rubashkin and the $20,000 in cash and passports found in a travel bag in the Rubashkin home. Agriprocessors is the giant kosher slaughterhouse in Postville, Iowa that was raided in May by immigration officials, resulting in the arrest and detention of about 400 illegal immigrants.

Rubashkin was arrested last Friday on the bank fraud charges (earlier); he is accused of diverting millions of dollars in customer payments that were part of First Bank’s collateral and instructing an employee to delete evidence of the scheme from the company’s computers. His arrest came just one day after he posted bond on criminal immigration charges resulting from the May raid. His trial on the immigration charges is scheduled for January 20, but no date has been scheduled on the bank fraud charges (Des Moines Register, Iowa Independent).

Meanwhile tensions are reportedly very high in Postville, where the plant sits idle and workers have not been paid as promised. Threats of violence have been reported (Iowa Independent, Failed Messiah).

Agriprocessors’ Sholom Rubashkin Charged With Bank Fraud

Dave Westheimer — Tue, 18 Nov 2008 07:18:37 +0000

It’s been a bad year for former Agriprocessors CEO Sholom Rubashkin. The giant kosher meat processing plant he ran for years was raided by ICE in May, resulting in the arrest and detention of about 400 illegal immigrants and his removal as CEO. The Postville, Iowa plant is owned by his father, Aaron Rubashkin. On October 30, Sholom Rubashkin was arrested and charged with charged with with conspiracy to harbor undocumented aliens for profit, aiding and abetting document fraud and aiding and abetting aggravated identity theft. On November 5, Agriprocessors filed Chapter 11 bankruptcy.

Last Friday, he was rearrested, this time on charges of bank fraud. He’s accused of defrauding a bank on Agriprocessors’ $35 million line of credit by diverting millions of dollars in customer payments that were part of the bank’s collateral. He also allegedly instructed an Agriprocessors employee to delete evidence of the scheme from the company’s computers.

Rubashkin had been released on bond Thursday on the October 30 immigration charges, but he was taken back into custody early Friday. After an initial appearance later on Friday before US Magistrate Judge Jon Scoles, he was ordered held pending a detention hearing scheduled for Wednesday (DOJ, Des Moines Register).

San Antonio Exporter Sentenced To 117 Months In Prison For Ex-Im Bank Fraud

Dave Westheimer — Wed, 29 Oct 2008 06:52:32 +0000

Andrew Parker of San Antonio, owner of San Antonio Trade Group, Inc., was sentenced on Monday to 117 months in prison by US District Judge Fred Biery for defrauding the Export-Import Bank of the US of $107 million. In an indictment unsealed on May 1, Parker was charged with conspiracy, wire fraud, use of a false document, money laundering, tax evasion and filing a false tax return. In August, he pleaded guilty to 11 of the 28 counts in the original indictment; Our earlier entries cover his alleged actions, which involved such a large percentage of the Ex-Im Bank’s loan portfolio that the bank’s management has had to revamp the whole program and cut back its offerings. Yet the Express-News quotes Parker as telling Judge Biery: “I was but a cog in this big machine. The truth is I’m caught in a system that, like with many agencies in Washington, is defective.” The DOJ Press Release (.pdf) is here.

San Antonio Exporter Pleads Guilty In Ex-Im Bank Fraud

Dave Westheimer — Fri, 22 Aug 2008 06:34:58 +0000

Andrew Parker of San Antonio, owner of San Antonio Trade Group, Inc., pleaded guilty on Thursday to defrauding the Export-Import Bank of the US. WOAI reported Wednesday that US District Judge Fred Biery had given Parker one day to decide whether or not to accept a plea agreement. In an indictment unsealed May 1 (earlier here and here) Parker was accused of falsifying loan applications, submitting false reports that goods were bought with the loans, and diverting millions of the loan proceeds for his personal use. As much as $163 million was allegedly involved. He pleaded guilty to 11 of the 28 counts in the indictment, including conspiracy, wire fraud, money laundering, tax evasion, and filing false tax returns. Under the plea deal Parker faces up to ten years in prison and up to $10 million in restitution plus $495,000 in tax liability (WOAI, DOJ).

Oregon Woman Indicted In Nigerian Check Scam

Dave Westheimer — Mon, 18 Aug 2008 06:41:26 +0000

Ella Mae Letellier of Ontario, Oregon has been indicted by a federal grand jury in Boise on 29 counts of mail and wire fraud in connection with a Nigerian check scam she allegedly helped run out of Payette, Idaho. It’s a rerun of the scheme for which a Washington woman was sentenced to prison in June (earlier): a seller is paid with a phony check for more than the amount of the goods, returns the excess money and winds up liable for the entire amount when the counterfeit check is eventually returned. Letellier allegedly acted as an accomplice for Patrick Anthony of Nigeria by sending out counterfeit checks on his behalf (Idaho Statesman). This scheme has been so well publicized online that it boggles the mind that people still bite. David Hannum was right.

Attorney Pleads Guilty In Bank Loan Bid Rigging Scheme

Dave Westheimer — Tue, 29 Jul 2008 04:30:36 +0000

Attorney Paul Arparo of Hartford, Connecticut pleaded guilty on Thursday before US District Judge Alvin Thompson in Hartford to one count of conspiracy to commit financial institution bribery and one count of bank fraud in connection with a bid rigging scheme involving the sale of bank loans. Arparo admitted that between 2001 and 2007 he conspired with Kevin O’Keefe,a vice president of Fleet Bank (later acquired by Bank of America) and an unnamed real estate developer to rig the bidding process on portfolios of distressed loans that Fleet offered for sale. O’Keefe, who pleaded guilty in June, supplied Arparo and the developer with inside information and gave false information to other bidders so that the developer could submit the winning bid on the properties. Arparo acknowledged that he and O’Keefe shared $1.4 million in payoffs from the developer. Aparo faces a statutory maximum of 35 years in prison. His sentencing is scheduled for October 14 (Newsday, DOJ).

Bank Branch Manager Sentenced to 168 Months In Prison For Long-Running Embezzlement

Dave Westheimer — Fri, 18 Jul 2008 06:17:00 +0000

Rhonda Harris of Wagoner, Oklahoma on Tuesday was sentenced to 168 months in prison by US District Judge Ronald A. White in Muskogee for embezzling millions from bank customers of Arvest Bank and its predecessors over a 25 year period. Harris pleaded guilty in March 2008 to one count of embezzlement by a bank officer and one count of money laundering; she also received 120 months on the money laundering count, to be served concurrently. From the sentencing press release:

On October 23, 2006, a bank customer went to the bank branch in Tulsa to cash a CD she had purchased at the Wagoner branch. Tulsa branch officers were unable to find evidence that the CD existed. The officials researched other accounts and determined that several accounts had been compromised.

An executive Vice President immediately confronted the defendant. She confessed that she had been stealing from the bank for 25 years. She was quickly removed from the bank and interviewed that day. She gave a partial list of affected customers, accounts, and amounts.

82 customers suffered losses and about $5.6 million has been paid to them by the bank and Chubb Insurance. That amount includes interest that would have been earned had the money not been stolen (The Oklahoman, DOJ).