Bank manager sentenced in mortgage fraud in Pennsylvania

A former Citizens Bank branch manager who provided false documents underlying mortgages will get home confinement and probation, U.S. District Judge Nora Barry Fischer decided today.



Crystal Spreng, 40, of Cabot, ran the Bloomfield branch for Citizens Bank, and won a manager of the year award in 2006, according to court filings. But from 2005 through 2007, according to a June 2009 indictment, she was a bit player in a mortgage fraud ring run by broker Robert Arakelian, who has pleaded guilty but has not yet been sentenced.



Ms. Spreng's role was to confirm to other lenders borrower bank balances that were not actually in their accounts. Prosecutors accused her of involvement in nine mortgages totaling $608,501, but she pleaded guilty to just one count and argued in pleadings that Mr. Arakelian pasted her signature without her knowledge on some of the documents he used to justify loans.



Assistant U.S. Attorney Brendan Conway argued for, at the very least, confinement in a halfway house. "We cannot have bank managers filling out fraudulent verifications of deposits," he told Judge Fischer. "That has got to stop."



Defense attorney John A. Knorr, though, successfully argued that Mr. Arakelian was "a spider who ensnared" Ms. Spreng in a broader scheme.



Judge Fischer said she was swayed in part by Ms. Spreng's difficult upbringing, her charity work for homeless veterans and others, her close family including three children ages 16 to 21, and the humiliation and career loss she has already suffered.



Ms. Spreng will be allowed to continue working as a waitress during six months of home confinement as part of five years of probation. If prosecutors can identify victims and amounts lost, she will have to pay restitution