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Thursday, October 28, 2010

Illinois Bank exec accused in $2.4M fraud

A Chicago Ridge man was accused Thursday of fraudulently selling his bank customers promissory notes totaling $2.4 million, then using the money to gamble at casinos, renovate his home and make credit card payments.

Beginning in 2002 and lasting until January 2009, banking executive Glenn J. Kozeluh obtained money from customers by falsely stating the money would be placed as investments to collateralize loans to buy small banks, according to a criminal complaint filed in U.S. District court.

Instead, Kozeluh used the money for personal expenses, the complaint said.

To lull the customers into a false sense of security, Kozeluh would also use the money to make interest payments and pay principal owed to existing promissory note holders, according to the complaint. He would create fake life insurance documents and then offer to customers additional collateral by assigning the insurance policy proceeds should his death occur before repayment of the promissory notes.

According to the charges, promissory note holders suffered losses totaling at least $2.4 million.

Former Missouri Bank President Pleads Guilty

Beth Phillips, United States Attorney for the Western District of Missouri, announced that the former president of Hume Bank in Bates County, Mo., pleaded guilty in federal court today to making false statements to the FDIC as part of a bank fraud scheme that caused such significant losses that the bank was pushed into insolvency.

Jeffrey W. Thompson, 40, of Hume, Mo., pleaded guilty before U.S. Magistrate Judge Sarah W. Hays to the charges contained in a Dec. 1, 2009, federal indictment.

Thompson became president of Hume Bank in 2001. From Jan. 1, 2004, through Aug. 31, 2007, when he left the bank, Thompson concealed problem loans from state and federal bank examiners. Due primarily to loan losses on loans originated and administered by Thompson, in which he masked past due loans by altering loan maintenance records, the bank became insolvent and was closed by the Missouri Division of Finance on March 7, 2008. In order to meet obligations to depositors, the FDIC insurance fund sustained a loss of $4,324,463.

Thompson admitted that he masked past due loans by altering loan maintenance records. For example, past due principal was reduced to zero in 1,584 instances, past due interest was reduced to zero on 1,460 occasions, and 1,445 maturity dates were changed on the loan maintenance reports. The great majority of these changes were not supported by loan modification agreements in bank files. Thompson personally made the majority of the changes. The false loan maintenance reports concealed problem loans from state and federal bank examiners and from the bank’s board of directors.

Thompson also completed false Officer’s Questionnaires, by falsely stating that the bank had no accommodation loans, or nominee loans, and by falsely stating that the bank had no instances of capitalized interest. In truth, Thompson had made accommodation, or nominee loans, to relatives from which he personally profited, and had made loans which capitalized interest.

By pleading guilty today, Thompson agreed to forfeit to the government $300,000, which represents proceeds from the fraud scheme, or his residential property.

Under federal statutes, Thompson is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Kate Mahoney. It was investigated by the Federal Deposit Insurance Corporation and the Federal Bureau of Investigation.

Former Greenwood, South Carolina Bank Manager Pleads Guilty To Embezzlement

A woman from Ninety-Six pled guilty in Federal Court to embezzling bank funds for over a year.

United States Attorney Bill Nettles said that 31-year old Kristen Miles Anderson pled guilty to embezzling bank funds and will be sentenced at a later date.

In a prepared statement, Nettles stated that evidence presented at the change of plea hearing established that Anderson, who was the branch manager of a Sun Trust bank in Greenwood, began taking money from her cash drawer beginning in or about October 2008 to pay personal expenses. According to the release, Nettles said Anderson changed her nightly cash figures to "force balance" and avoid detection. When she expected internal audits, Anderson forged withdrawl slips and took money from customer's accounts and stole in excess of $90,000 until bank officials and United States Secret Service agents discovered the wrongdoing in December 2009.

United States Secret Service agents revealed bank documents and interviewed Anderson. Nettles said Anderson waived her Miranda Rights and confessed to taking money from the cash drawer and stealing money from customer's accounts.

Anderson faces a maximum sentence of 30 years in prison and or a $1,000,000 fine.

Wednesday, October 27, 2010

Ariel woman sentenced for embezzling from Ridgefield, Washington bank

An Ariel woman was sentenced to seven months in prison for embezzlement Monday in U.S. District Court in Tacoma, the U.S. Attorney's Office said.

Authorities said Michele L. Chartier, 26, pleaded guilty in July to embezzling $60,000 from a vault and cash dispensing machines at the Ridgefield branch of the IQ Credit Union, where she worked as an assistant manager.

Chartier, who was first hired at the credit union in 2004, embezzled the money between March and September of last year, the U.S. Attorney's Office said.

Authorities said Chartier tricked a customer into signing loan papers, then used the proceeds of the fraudulent loan to cover her crime.

Chartier will also serve two months home detention following her prison term, authorities said.

Monday, October 25, 2010

Defendant locked up for contacting juror in Massachusetts

A Grafton Street man on trial on bank embezzlement and attempted counterfeiting charges was locked up today after the foreman of the deliberating jury in his case reported that she was approached by someone on his behalf over the weekend.
Judge Peter W. Agnes Jr. revoked George Labadie's release on personal recognizance after hearing from him and the female juror and ordered that Mr. Labadie remain in custody without bail until the conclusion of the Worcester Superior Court trial.
The juror, who was later discharged and replaced by an alternate juror, told Judge Agnes during a private sidebar conference this morning that Mr. Labadie was present Saturday when another man approached her at the restaurant where she worked, according to a summary of her comments the judge provided in open court.
When told by Judge Agnes that he was considering holding him in summary criminal contempt, Mr. Labadie asked to respond. Mr. Labadie said he and a man he identified as Chad Richardson happened to be in the restaurant in question Saturday, when he thought he recognized the woman as a juror in his case. He said he told Mr. Richardson he had to leave and did so after purchasing the sandwich he had ordered.
At some point while they were still in the restaurant, Mr. Richardson left his side, Mr. Labadie explained to Judge Agnes.
“I never sent anybody to approach anybody, your Honor,” he said.
Mr. Labadie went on to say that he first met the juror in question eight to ten years ago at a diner. He said he saw her on a couple of occasions after that and gave her his cell phone number.
On Wednesday, Oct. 13, two days after his trial began, Mr. Labadie said he was on the front steps of the courthouse smoking a cigarette when the juror walked by him and told him he looked familiar. She then said she considered all police officers “ ‘liars,'” according to Mr. Labadie.
After telling her he could not talk to her and starting to walk away, he received a cell phone call from the woman and hung up as soon as he recognized her voice, Mr. Labadie told the judge.
As he was leaving the courthouse that day, he said, he walked by the woman and she said, “ ‘Good night, sweetie,' ” according to Mr. Labadie. He described another courthouse encounter with the juror after she reportedly got on the elevator in which he was riding.
He said he did not recognize the woman as someone he knew during jury selection in his case and did not report their later conversations to the court or his lawyer, H. Hoover Garabedian, because he was frightened and did not know what to do.
Judge Agnes spoke to the juror privately again after hearing from Mr. Labadie. Assistant District Attorney Jeffrey T. Travers asked that Mr. Labadie be held on $100,000 cash bail during the pendency of his trial.
Mr. Labadie, 51, and his wife, 59-year-old Susan Carcieri, are accused of staging an Aug. 27, 2002, robbery at the Wyman_Gordon Federal Credit Union at 530 Grafton St., where Ms. Carcieri worked, and stealing $210,000. They are also facing attempted counterfeiting charges based on items police said they seized during a search of the couple's home at 521 Grafton St. two days after the reported robbery.
After Mr. Travers made his bail request this morning, Judge Agnes said he credited the testimony of the juror, and not Mr. Labadie, concerning their contacts. Saying he was concerned about the risk of jury “contamination,” he revoked Mr. Labadie's release on his own recognizance and ordered him held without bail until the trial is over.
The judge then excused the jury foreperson, replaced her with an alternate juror, and directed the jurors to begin their deliberations anew.
The jury had deliberated for more than 17 hours over three days without reaching a verdict.

Embezzlement victim awaits word on probe in Maine

The president of a statewide builders association said his organization has not been reimbursed nor given any information concerning the embezzlement of more than $82,000 last year by a bank employee.Charlie Huntington, president of the Maine Contractors and Builders Alliance Inc., said the organization's leaders have been very anxious to hear some news but have heard nothing from either the federal prosecutors or Camden National Bank.The alliance filed a lawsuit Jan. 21 in Knox County Superior Court in Rockland against Christina L. Torres-York of Warren, claiming she used her position as the organization's treasurer and as an employee of Camden National to siphon off $82,940."We struggled. We almost went out of business," Huntington said of the impact that the loss of the money had on the alliance.The organization is a nonprofit corporation with a stated mission of improving the building industry while providing quality housing for Maine people. The alliance has about 175 members comprising the building, banking, insurance and education fields.The alliance's president said the organization had built one home and was well into building another with the assumption that it had sufficient equity in the first structure to complete the second home. That is when the organization learned that Torres-York had taken money from the alliance.Torres-York served as its volunteer treasurer for several years until she resigned from the post under threat of removal on Nov. 13, 2009, according to the alliance's lawsuit.Torres-York was employed by Camden National Bank for nearly 20 years until she was fired on Oct. 16 when the bank learned she had withdrawn $749,402 from at least five customers' lines of credit, according to a separate lawsuit filed by Camden National.The alliance maintained a checking account at Camden National, a checking account at Bangor Savings Bank, and a line of credit at Bangor Savings. The lawsuit cites several instances of her withdrawing money from the Bangor Savings account held by the association made out to Camden National but the money was never deposited in the Camden National accounts.The association's checks that Torres-York made out to Camden National were cashed by her at Camden National and she took the cash, the association's lawsuit states.The association stated that when it heard about the large misappropriation of money from Camden National it checked with Torres-York and learned she was the subject of the investigation. The organization was soon contacted by law enforcement officials.Torres-York was asked to resign from the association and she did.Huntington said the bank's position is that Torres-York took the alliance's money through her role as the organization's treasurer and not her position as a bank employee. The alliance's president said, however, that she would not have been able to do what she did if not for her position with the bank.Camden National issued a brief statement last week saying it too was awaiting action on the criminal investigation. The bank stated that any customers affected by Torres-York's actions were made whole.Torres-York has not been charged with any criminal offenses. A spokesman with the U.S. Attorney's Office in Portland declined last week to comment on the Torres-York matter and would not even confirm that the matter is under investigation.A judge agreed to place a $750,000 lien on Torres-York's property for Camden National's claims and an $82,940 lien on behalf of the builders alliance.

Saturday, October 23, 2010

Trumbull man admits role in $4.8 million bank fraud in Connecticutt

A Trumbull man who ran an automated teller machine dispensing company admitted last week to being involved in a fraudulent scheme that cost Domestic Bank of Cranston, R.I. $4.8 million.Joseph Sarlo, 54, of Trumbull, pleaded guilty to conspiring to commit bank fraud during proceedings before U.S. Magistrate Judge Joan G. Margolis. He faces up to 30 years in prison when he is sentenced Jan. 3.Sarlo served as chief executive officer of New England Cash Dispensing Systems, Inc. As part of a contract with Domestic Bank, Sarlo's company provided automated teller machines bearing the bank's logo in convenience stores and gas stations throughout the northeast. Under the terms of the agreement, Domestic would provide the cash to be used inside the machines to only some of them. Sarlo's firm and the merchants where the machines were located would provide the money to other machines.However, Sarlo admitted that from 2007 to February, 2010, he and others would order money in increments of $10,000, $6,000 and $4,000 from Domestic claiming it was being loaded into the bank's machines. The conspirators loaded the money into machines of New England Cash Dispensing and then provided the bank with a false accounting of the money.The case is being investigated by the FBI and prosecuted by Assistant U.S. Attorney Paul Murphy.

Local Fifth Third Bank employee arrested on bank fraud charges in Indiana

.A Fifth Third Bank employee was charged with bank fraud after being accused of using customer information to create fraudulent accounts and to gain access real ones, according to court records unsealed this week.Tiffany Nelson was arrested Monday in Hammond and released on a $20,000 unsecured bond.
Nelson allegedly used her employment status with Fifth Third to access customer profiles and accounts -- or create new ones -- between August and November 2009 without customer permission, according to the indictment.It was unknown at which branch Nelson worked, or how much money she is charged with taking in the alleged scheme.Portage attorney Claudia Traficante, who is representing Nelson, did not return a call for comment Tuesday, and Fifth Third Bank declined to talk about the case."We can't offer any comment on an ongoing investigation," said Andrew Hayes, Fifth Third spokesman.When asked whether corporate policy regarding employees with pending criminal charges required job termination or suspension, Hayes said cases are evaluated individually."It just varies depending on the situation," he said. "But if any confidentiality has been breached, we would absolutely remove that person and then begin to repair."Nelson is scheduled to be arraigned in Hammond federal court at 11 a.m. Tuesday in Magistrate Judge Andrew Rodovich's courtroom.

Thursday, October 21, 2010

Mooresville, North Carolina banker charged with falsifying $1M in loans

A Mooresville community banker has pleaded guilty to giving herself more than $1 million in loans by falsifying loan applications with the names of straw borrowers, according to a plea agreement filed Monday by the U.S. Attorney's Office.Karen Floyd made at least 11 loans to herself worth $1.08 million while she was an executive at Southern Community Bank, according to court records. The loans were made between March 2006 and November 2009.A straw loan is made when the person whose name is on the loan application is not the person who will actually benefit from or pay back the loan. Straw borrowers may or may not know that their names have been used in connection with a loan. The U.S. Attorney's Office didn't say if any of the straw borrowers in the Floyd case knew that their names were being used. It did say Floyd was aided "by others known and unknown to the United States Attorney."Floyd's attorney, Charlotte lawyer Eben Rawls, did not return calls for comment.According to the charge, Floyd, 49, "caused payments to be made" on the straw loans. Authorities didn't specify how the false loans were detected, although in many cases, straw loans are discovered after the death of a person listed as a straw borrower. The FBI, the Federal Deposit Insurance Corp. and the Office of the N.C. Commissioner of Banks are also involved in the investigation.Floyd is charged with one count of "theft/embezzlement/misapplication by (a) bank officer," a charge that carries up to 30 years in prison and up to $1 million in fines. As part of the plea agreement, Floyd agreed to forfeit any property that authorities want to seize to repay the loans. She cannot work again at any bank that is FDIC insured. If jailed, she must participate in the Bureau of Prisons Inmate Financial Responsibility Program.The U.S. Attorney's Office didn't say how Floyd had spent the money. Property records list her as an owner of a house in Salisbury worth $458,000 and a house in Vass worth $106,000.
Since the summer, there have been several charges against former Charlotte-area bankers accused of stealing from their companies or their clients. They range from a former Bank of America branch manager charged with accepting bribes worth $38,000 to a former Wachovia distribution executive who pleaded guilty to embezzling more than $11 million from the bank by falsifying contractor invoices.Floyd became Southern Community's Lake Norman regional executive around August 2006, leading the bank's push into the Charlotte area and working on business development, branch management and retail lending. Before joining Southern Community, she worked at Wachovia and SunTrust, according to the bank's 2006 annual report."Karen is an excellent fit for a leader in the booming Charlotte-Statesville corridor," the bank said at the time.As a regional executive, Floyd served as the bank's face at various community events. Last year, she represented Southern Community at a statewide meeting of the N.C. Center for Nonprofits, according to meeting records, and made an appearance when the bank donated to the local YMCA following the opening of a Mooresville branch.Southern Community's president did not return calls for comment.Southern Community Bank, based in Winston-Salem, is. like many small banks, struggling with troubled loans and low demand for new loans. In the second quarter, the bank lost $371,000 for common shareholders.The bank has 22 branches, mostly in the western half of North Carolina, and about 300 employees, according to the company website. Its motto is "Small Enough to Care." Staff researcher Maria David contributed.

Wednesday, October 20, 2010

Currency exchange employee allegedly made off with nearly $10K in Chicago

A long-time employee of Harlem & 159th Street Currency Exchange allegedly stole more than $9,800 from the store through 12 transaction performed for customers between July 30 and Oct. 1.

According to Tinley Park Police, the money was reported stolen from the store after the transactions were discovered when the woman didn’t return to work on Oct. 4.

The latest transaction was made on Oct. 1 when $1,000 was stolen. Police say it appears the employee entered amounts higher than requested by customers and then kept the excess cash.

The woman worked at the store for 10 years and hasn’t reported to work since Oct. 1, police said Monday.

Sunday, October 17, 2010

Former Massachusetts Bank Branch Manager Charged in Mortgage Scam

A former Bank of America branch manager was charged today in federal court with wire fraud and bank fraud for his role in connection with a multi-year, multiproperty mortgage fraud scheme in Dorchester and Roxbury. ARTHUR SAMUELS, 36, of Mattapan, was charged in an Indictment with six counts of wire fraud and one count of bank fraud. The Indictment alleges that from September 2006 to July 2008, SAMUELS and others committed fraud in connection with the purported sale of condominium units in Dorchester. According to the charges, developer Michael David Scott arranged to purchase multi-family dwellings and then sold individual units in the buildings to straw buyers recruited by Scott, SAMUELS, and others. The straw buyers’ financing for the purchases was obtained by submitting mortgage loan applications that falsely represented key information, such as the buyers’ assets, down payment and intention to reside in the condominiums. SAMUELS also caused false verifications of deposit to be created in support of loan applications submitted to lenders in the names of straw buyers, and acted as a straw buyer himself on three property transactions. In most instances the lenders were led to believe that the straw buyers had made substantial down payments and paid substantial sums at closings.If convicted, SAMUELS faces up to 20 years’ imprisonment to be followed by three years of supervised release and a $250,000 fine for each count of wire fraud, and up to 30 years imprisonment to be followed by five years of supervised release and a fine of $1 million for bank fraud.United States Attorney Carmen M. Ortiz, Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, and William P. Offord, Special Agent in Charge of Internal Revenue Service Criminal Investigation – Boston Field Division made the announcement today. The case is being prosecuted by Assistant U.S. Attorneys Victor A. Wild and Ryan M. DiSantis of Ortiz’s Economic Crimes Unit.The details contained in the Indictment are allegations. The defendant is presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law. Mortgage fraud is a key focus of the Department of Justice. The Department of Justice alongside its federal, state and local partners is committed to investigating and prosecuting significant financial crimes. The Department is committed to combating discrimination and fraud in the lending and financial markets, and recovering proceeds for victims of financial crimes.

Woman Gets Probation in West Virginia Embezzlement Case

A Glen Dale woman who embezzled more than $40,000 from BB&T bank in Moundsville was placed on three years probation Friday for her crime.Marshall County Circuit Judge Mark A. Karl handed down the sentence to Connie Derrow, 64, despite the prosecution requesting she be incarcerated for her crime.
Derrow pleaded guilty in July to embezzling $44,000.75 from the BB&T bank on Jefferson Avenue. According to the criminal complaint, Derrow worked there as a vault teller and was responsible for receiving cash deposits from area businesses.The embezzlement occurred over five months between October 2008 and February 2009. A coworker reported Derrow to bank officials after discovering suspicious receipts Derrow had processed.During an internal investigation, it was discovered Derrow would steal money from the cash deposits and process the money as if it had been deposited, the complaint states. When questioned about the missing funds, Derrow reportedly said she had used the money at Wheeling Island Hotel-Casino-Racetrack and planned to pay it back after she "hit the jackpot."Derrow spoke of her gambling addiction Friday, telling Karl she believed it is a shame that gambling came to the area in the first place."I am still struggling with it," she said.Though she had paid about $4,000 in restitution to the bank prior to a hearing in September, Derrow has not made payments since then. Derrow admitted to Karl that in the past few months she had attempted to acquire money to pay restitution by gambling. Marshall County Assistant Prosecutor Eric Gordon said though BB& officials had said they preferred restitution over jail time for Derrow, they were not opposed to time being imposed and he requested that Derrow serve time.However, in handing down the sentence, Karl said Derrow's age and lack of criminal history was reason enough to allow her to remain free and on probation.''I can't in good conscience put her in a penitentiary,'' he said.Karl sentenced Derrow to one to 10 years in jail, suspended for three years probation. Along with the regular stipulations of probation, Derrow must seek employment within the next 30 days and provide proof to the court.

Friday, October 15, 2010

Polo, Missouri Woman Pleads Guilty to $414,000 Bank Theft

Beth Phillips, United States Attorney for the Western District of Missouri, announced that a Polo, Missouri woman pled guilty in federal court today to embezzling more than $414,000 from Bank Northwest, where she was employed in Polo and Hamilton, Missouri.

Laurine K. Calvert, 55, of Polo, waived her right to a grand jury indictment and pleaded guilty before U.S. District Judge Greg Kays to a federal information that charges her with embezzlement by a bank employee.

Calvert admitted that she embezzled $414,124 from Bank Northwest from Feb. 10, 2003, to Feb. 8, 2010. Calvert was employed by Bank Northwest in both Polo and Hamilton as a teller and bank loan secretary.

Calvert took money from five separate customer accounts. She later created four fictitious loans, using part of the funds from these loans to replace the money she had taken from customer accounts. Calvert used the rest of the loan money for her personal benefit, giving some to family members and spending some during her monthly trips to gamble at Kansas City casinos.

Under federal statutes, Calvert is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Daniel M. Nelson. It was investigated by the Federal Bureau of Investigation

Thursday, October 14, 2010

Lake County bank employee charged with stealing money, identities of elderly and dead customers in Florida

A Lake County woman who worked at a credit union and a bank stole money from both financial institutions and elderly customers, according to an indictment that estimates she embezzled more than $400,000.Nazreen Mohammed, 47, faces up to 30 years in prison if convicted of bank fraud or embezzlement.She worked at as a loan officer at Fairwinds Credit Union in 2009 where she used her status as an employee to access customer accounts, creating loans and making withdrawals from customers, many of whom were elderly or dead.Authorities said Mohammed tried to disguise her schemes with multiple transactions.The federal indictment alleges that Mohammed tried to steal $127,000 from the credit union and its customers and more than $300,000 from customers of a Lake County branch of the Royal Bank of Canada.She tapped account information of some of that bank's elderly customers, too. The indictment said she used information from the accounts to make unauthorized withdrawals and change account beneficiary designations.

Friday, October 8, 2010

Former Bank Employee Indicted for Stealing Funds Held in Trust in Texas

A former administrative assistant in the Trust Department of a Galveston branch of Frost Bank has been indicted by a federal grand jury for bank fraud and aggravated identity theft, United States Attorney José Angel Moreno announced today. Michele Lauryn Osteen, 27, of Houston, charged in a 16-count indictment returned by a federal grand jury in Houston on Sept. 27, 2010, surrendered to federal authorities today and is expected to appear before United States Magistrate Judge John R. Froeschner in Galveston at 2:00 p.m. today where the issue of bond is expected to be raised.The 16-count indictment accuses Osteen of 15 counts of bank fraud and one count of aggravated identity theft. The indictment alleges that between June 23, 2008, and June 16, 2010, Osteen defrauded Frost Bank, an FDIC-insured depository institution, by stealing approximately $95,000 in funds from trusts it administered.The Trust Department of Frost Bank served as trustee for a number of different trusts including trusts set up for the health, education, support and maintenance of minors and incapacitated adults, many of whom received large sums of money following severe injuries. As trustee for such trusts, the bank managed significant assets for those beneficiaries, which included paying their daily living expenses and making other disbursements on their behalves.The indictment alleges Osteen fraudulently obtained funds from numerous trust accounts by requesting disbursements from the accounts in the form of Frost Bank checks, representing that the disbursements were legitimate expenditures typical for the trusts she helped manage, when in fact they were for her financial benefit.
According to the indictment, once Frost Bank issued the checks, Osteen allegedly requested checks be sent to her branch in Galveston, where she took possession of the checks and used them in various ways for her personal benefit. On some occasions, Osteen allegedly instructed Frost Bank to make the checks payable to companies, creditors and other entities to which she owed money and paid personal bills, debt and fines. On other occasions, the indictment alleges Osteen instructed Frost Bank to make the checks payable to Frost Bank or to a trust beneficiary, which she then used to obtain money orders she spent or deposited into her accounts. A few times, Osteen instructed Frost Bank to make the checks payable to a retailer, then, according to the indictment, used the funds for shopping at that retailer. Many times, she allegedly instructed Frost Bank to make the checks payable to a healthcare provider, which she then altered by typing an instruction on the checks to reflect that they were for cashier’s checks for “MLO,” a fictitious entity. Osteen then used those altered checks to obtain cashier’s checks from Frost Bank, which she deposited into her accounts. To avoid detection, according to the indictment, Osteen obtained the money orders and cashier’s checks at her Frost Bank branch, where she was known and therefore less scrutinized, but deposited them at a different Frost Bank branch in Galveston. The indictment accuses Osteen of obtaining approximately $95,000 in this fraudulent manner, which she allegedly used to fund a high-consumption lifestyle. Each of the 15 counts of bank fraud carries a maximum penalty of up to 30 years' imprisonment and a fine of up to $1 million, upon conviction. A conviction for aggravated identity theft carries a mandatory two-year term of imprisonment which must be served consecutive to any term of imprisonment imposed for any bank fraud convictions. The FBI’s Texas City Resident Agency, with the assistance of Frost Bank, led the investigation leading to the charges. Assistant U.S. Attorney Stephen L. Corso is prosecuting the case.An indictment is a formal accusation of criminal conduct, not evidence.

Ex-Park Avenue Bank Chief Antonucci Pleads Guilty to Embezzling TARP Money

Charles Antonucci, the former president of Park Avenue Bank in Manhattan, pleaded guilty to charges he lied to regulators and embezzled bank funds. Antonucci, 59, told U.S. District Judge Naomi Buchwald today that he lied to get more than $11 million in federal bailout funds for the bank, took bribes and embezzled money and participated in a scheme to defraud Oklahoma insurance regulators in the $37.5 million sale of an insurer that was later forced into receivership. Prosecutors said Antonucci is the first person convicted of trying to defraud the U.S. Troubled Asset Relief Program, which was passed by Congress to prop up threatened banks. Antonucci pleaded guilty to criminal counts including fraud, bribery, embezzlement and conspiracy. Antonucci, who was arrested in March, is free on $2 million bail. He faces as much as 20 years in prison on the most serious counts when he’s sentenced in April.

Thursday, October 7, 2010

Falling Waters, West Virginia man accused of embezzling money

A 22-year-old Falling Waters, W.Va., man is accused of embezzling $5,500 from a woman’s bank account while he worked as a teller at the Inwood, W.Va., branch of BB&T, according to court records.
Cody Allen Seibert, of 35 Galbus Court, was arraigned Wednesday on one felony count of embezzlement by Berkeley County Magistrate Sandra L. Miller, according to court records. Berkeley County Sheriff’s Deputy Michael St. Clair found the defendant used the woman’s money he took June 30 to buy a 1998 Kawasaki motorcycle for $3,400 and a laptop computer from Best Buy, according to court records.Seibert’s girlfriend told police that Seibert was making $500 payments on the motorcycle and that the laptop was from a friend, according to court records. His girlfriend, however, told police that she later found a receipt indicating that the laptop was actually purchased at Best Buy, according to court records. Kelly Lupis, a bank fraud investigator for BB&T, told police that Seibert changed his story about how he handled a supposed request by the victim to withdraw $5,500 from her account, according to court records. Lupis indicated the transaction, as Seibert explained it, would have been nearly impossible to complete in less than two minutes and between two other transactions, according to court records. Seibert also would not have had enough $100 bills in his drawer to complete the transaction as he had claimed and would have had to use $20 bills, Lupis told police, according to court records. The motorcycle owner told police that Seibert paid him for the bike with $20 bills, according to court records. Seibert is no longer employed by BB&T.

Petal, Mississippi woman sentenced for embezzlement

U.S. District Court Judge Keith Starrett sentenced a Petal woman who pleaded guilty to embezzlement to 15 months in prison followed by five years of supervised release today.Pamela Swilley, 40, was a loan officer at the Hancock Bank branch in Petal.In addition to her prison sentence, Swilley must also pay $83,414.87 in restitution to the bank for funds embezzled. “The only thing I know what to say is that I’m truly sorry,” Swilley said. “I’ve ruined my life and a lot of other lives. It’s been hell.”

Wednesday, October 6, 2010

Texas Bank exec to plead guilty

A former La Coste National Bank vice president plans to plead guilty to a charge of embezzling $30,000 from the financial institution. Mary Magdalene Crawford is scheduled to plead guilty Thursday to the alleged embezzlement scheme, which was detected in February after the bank was shut down by regulators because of unrelated fraudulent activity.
John Kuntz, Crawford's lawyer, said he anticipates his client will be placed on probation given that she has no prior criminal history and she already has raised at least half of the $40,000 she would have to pay in restitution. The sentencing guidelines call for a prison term of six to 12 months, Kuntz calculated. The charge carries a maximum sentence of 30 years and a maximum fine of $1 million.“She admitted to the wrongdoing all along,” Kuntz said. “She's very sorry for it.”The Office of the Comptroller of the Currency closed La Coste National Bank and the Federal Deposit Insurance Corp. was appointed receiver on Feb. 19. About two months later, Jody P. Gwyn, La Coste's former president, was indicted on charges he caused more than $7.3 million in losses at the bank. Plea negotiations are under way, though Gwyn has denied personally profiting.According to a plea agreement filed in Crawford's case on Friday, Crawford stated she fraudulently prepared 10 cashier checks worth $3,000 each and used the money to pay bills. Most of the checks were cashed in the last quarter of 2009.
Crawford balanced the bank's cashier's check account by withdrawing money from a customer's individual retirement account, the plea agreement states. She later reversed the transaction on Feb. 10.
The plea agreement states Crawford also stole $10,000 from the bank's vault, though that charge will be dropped as part of the plea. The money will be repaid as part of the restitution, however, Kuntz said.
Kuntz said Crawford had no knowledge of the fraudulent activity that led to the bank's closure.

Norwalk, Ohio Man Charged with Bank Embezzlement

Kylee A. Adams, 27, of Norwalk, Ohio, was charged in a criminal information with embezzling approximately $14,000.00 over a seven month period from the KeyBank, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, announced today. If convicted, the defendant’s sentence will be determined by the Court after review of factors unique to each case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The investigating agency in this case is the Federal Bureau of Investigation. The case is being handled by Assistant United States Attorney Thomas A. Karol.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

Tuesday, October 5, 2010

Prison sentence for bank embezzler delayed because of hip surgery in South Dakota

She is almost 68 years old and facing hip surgery -- and Margaret Hussey is going to prison for embezzlement.The Rapid City woman, who pleaded guilty to stealing almost $100,000 and manipulating more than $200,000 in First Western Federal Security Bank funds over a three-year period, was sentenced Tuesday to 10 years in prison, with seven years suspended. Seventh Circuit Judge Janine Kern refused to give Hussey the suspended imposition of sentence her attorney requested.The judge also bypassed a court service recommendation for a probationary sentence.Hussey, who is scheduled to have hip surgery Oct. 12, must begin serving her sentence six weeks after the surgery.She will be eligible for parole after nine months in prison.Hussey worked as a bank teller for more than 20 years. Her theft was discovered after she was terminated, according to bank president Jeff Fullerton.Fullerton declined to say why Hussey was fired.
After the sentencing, Fullerton praised the Rapid City Police Department and the Pennington County State’s Attorney’s Office for their professionalism in handling the case.Fullerton testified at Hussey’s sentencing, along with Janet Dowlin. Dowlin’s mother and two aunts were among Hussey’s victims.Dowlin said Hussey’s deception was particularly difficult for her. She described the former teller as “like family” to her late mother and two aunts. Hussey and Dowlin grew up together and attended school together, Dowlin said.
Hussey was very good to Dowlin’s elderly mother and aunts, bringing cinnamon rolls for Saturday morning coffee visits -- but all the time she was stealing from them, Dowlin said.According to testimony in court Tuesday, Hussey manipulated interest payments on certificates of deposits and intercepted inquires about accounts.“The idea that she could do this is very upsetting,” Dowlin said.The small, privately owned bank placed considerable trust in its employees and gives them a lot of responsibility, Fullerton testified.Employees can identify their customers by the sound of their voices on the phone, Fullerton said.Hussey laughed and joked with co-workers and customers, while all the time, she was stealing, forging and lying, Fullerton said.
Fullerton accused Hussey of “self-centered greed.” She used the money for travel, eating out, getting her hair fixed and helping her children, he said.Since Hussey’s crime was uncovered, the bank has made many changes and implemented several safeguards.The bank is insured. Customers’ losses were covered, Fullerton said.“The greatest damage was tarnishing the reputation of the bank in the community and with our customers,” Fullerton said, looking directly at Hussey.Hussey’s victims were all elderly, Pennington County deputy state’s attorney Gina Nelson said.Hussey was very good at covering her tracks and did a lot of calculating of interest payments, Nelson said.“She robbed Peter to pay Paul,” Nelson said.Nelson asked Kern to give Hussey a prison sentence, noting that the defendant did not cooperate with the investigation.
Nelson said that Hussey has failed to show “true, genuine remorse” for her crime.Hussey’s actions harmed the community, the bank and the individuals she stole from, 7th Circuit Judge Janine Kern agreed.Hussey’s actions reduced the public’s trust in the bank, Kern said.Kern ordered Hussey to pay back more than $109,000 in restitution. The restitution includes $8,061.30 to the bank, $1,828.50 to the Pennington County State’s Attorney’s Office and $99,227.88 to the bank’s insurance carrier. Hussey also owes $3,362 in attorney’s fees for her court appointed attorney, plus court costs.Hussey, who has lost her home, is living with a friend.Kern ordered that at least 20 percent of any future income be used for restitution.

Saturday, October 2, 2010

Two men sentenced in Birmingham, Alabama to prison for skimming Compass bank accounts

Two men Thursday were ordered to serve six months in a federal prison, followed by home detention, for their roles in a Birmingham bank fraud that took thousands of dollars from the accounts of older people.Their co-defendant had been ordered in August to serve 1 hour in prison, plus home detention, a sentence criticized by prosecutors as too lenient. All three pleaded guilty, and Compass Bank repaid the money to the accounts.Johnathan Goods, 33, was sentenced by U.S. District Judge Abdul Kallon to six months in prison, six months home detention, followed by three years su­pervised release. The judge also said Goods will be re­s p o n s i b l e f o r paying $56,800, plus interest, in res­titution jointly with his two co-defendants to Compass Bank.The U.S. Attorneys Office objected to Goods' sen­tence. Peggy Sanford, spokeswoman for the U.S. Attorneys Office, said the court departed from the cal­culated guidelines range in order to impose a split sen­tence of incarceration and home detention.Kallon said he believed the sentence to be appropri­ate within the goals of sen­tencing for punishment.Kallon based his sentenc­ing of Goods and co-de­fendant Justin Salter on fed­eral criminal guidelines expected to go into effect in November."Johnathan's truly sorry," attorney Joe McLean said. "He's ready to make amends by paying his restitution and is ready to start his life over."Salter was sentenced to six months in prison and two months home detention followed by three years su­pervised release and the res­titution. He was remanded into the custody of the U.S. Marshal after the hearing. Salter said he had deep re­morse and regret and apol­ogized to his family during the hearing.The bank fraud scheme involved account numbers from dormant bank ac­counts of older people, ac­cording to court documents. Goods, a former Compass Bank employee, identified the accounts. Salter would bring in withdrawal slips us­ing the account numbers for Haley Patterson, a bank teller and Salter's then girl­friend, to withdraw money. Patterson served a 1-hour sentence in August and is serving an eight-month home detention sentence.In all, six transactions involving Patterson totaled $41,800. Another $15,000 was withdrawn involving Goods, Salter and two tellers not involved in the scheme, according to court docu­ments.

Friday, October 1, 2010

Former bank manager avoids prison over embezzlement in U.K.

A retired bank manager who embezzled nearly £50,000 from an elderly woman who trusted him with her finances has avoided a prison sentence.Lyall McRobb admitted stealing tens of thousands of pounds from a family friend who was staying at the Balmedie House care home in Aberdeenshire.The 68-year-old was not jailed at Aberdeen Sheriff Court yesterday because of his “significant” mental and physical problems, and was instead put on probation for two years and ordered to repay the £47,613.24 within nine months.
Defence agent Gail Goodfellow said McRobb would have to sell the family home at 9 Crollshillock Place at Newtonhill and move to a council property to be able to return the funds.Asked if he wanted to comment and apologise to the victim’s family outside court yesterday, McRobb said: “No.”McRobb met his victim, a Mrs Reid, in the 1970s when she worked with his mother at an Aberdeen charity shop, fiscal depute Jonathan Kemp told the court.When her husband died in 1995 he began helping her with her finances, including savings of £145,000, and continued when she went into the care home two years later.Between January 14 1997 and October 3, 2005, McRobb began transferring money from her account to his own. He also got the woman to sign 12 blank cheques, the court heard.Nursing staff began to have suspicions about McRobb’s financial hold over Mrs Reid in 2002, but the crime only came to light four years later when her solicitor, who became executor to her estate, noticed “significant discrepancies” with her finances.
Mrs Goodfellow told the court that her client, a grandfather, had been “held in high regard” as a banker for nearly 30 years and had worked as a resource manager of the Royal Bank of Scotland, responsible for eight Aberdeen branches.When he retired in 1996, he kept spending money as if he was earning a full-time wage and supplemented his pension money with Mrs Reid’s savings.It was taken for no particular or extravagant purpose other than to fund the lifestyle he had become accustomed to,” said Mrs Goodfellow.“Mr McRobb is thoroughly ashamed of his behaviour. He is truly sorry he abused the trust put in him by Mrs Reid.
“It is extremely surprising, if not disturbing, that a man with Mr McRobb’s background and previous exemplary character, should have come involved in this tale of dishonesty.”Mrs Reid, who was 81 at the time of her husband’s death, died some time after the criminal investigation began. She and her husband had no children, but there was “a relative” who would have benefited from her estate.The criminal prosecution has put a “considerable strain” on McRobb, who has been diagnosed with severe depression and twice disappeared this year, reporting suicidal tendencies, the court heard. He has been diagnosed with Parkinson’s disease, as well as type 2 diabetes.Sheriff Malcolm Garden said: “This is an extremely serious matter. It involves a breach of trust, something no one would have expected from someone of your background and a very high level sum which has been embezzled. This case would undoubtedly justify a custodial sentence. Given your medical position and your previous good character, I can give you an opportunity to avoid a custodial sentence.”