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Sunday, July 28, 2013

Former Bank Employee To Face Sentencing in Arkansas

A former Fort Smith bank official should be sentenced to between 41 and 51 months in prison, according to a memorandum filed by prosecutors in U.S. District Court.
Mary Kay Newman, 45, who worked at First National Bank in Fort Smith for almost 23 years, pleaded guilty in March to embezzlement and misapplication of funds by a bank employee and is scheduled to appear before District Court Judge P.K. Holmes III on Aug. 15 for sentencing.
A memorandum, filed by Assistant U.S. Attorney Kyra Jenner, argues the court should follow the sentencing advisory guideline laid out in a pre-sentence report based on Newman’s repeated commission of fraud and deceit on multiple parties — Pharis and multiple banks — and the seriousness of the offense.
In 2009, Fort Smith resident Ruby Pharis purchased two certificates of deposit — totaling about $530,000 — at Chambers Bank in Fort Smith. When she renewed them a year later, the combined value was about $549,000.
When she required surgery and hospitalization in 2010, Pharis, 90, told federal investigators that power of attorney was necessary for Newman to pay Pharis’ bills while she was medically incapacitated, but she never remembered signing anything that gave Newman authority to cash checks, redeem the CDs or use her money for Newman’s personal benefit, according to a plea agreement.
Pharis and her late husband came to know Newman as customers of the Phoenix Village branch of First National Bank, where Newman worked from 2002 until she was fired Dec. 29, 2011.
According to court documents, on Jan. 19, 2011, Newman converted Pharis’ CDs at Chambers Bank in Fort Smith into six cashier’s checks totaling almost $560,000, kept $160,000 for her personal benefit and purchased two CDs in Pharis name for $300,000 and $100,000, according to court documents.
In March 2011, Newman converted the $100,000 to a cashier’s check, cashed it at First National and kept the funds, minus penalty for early withdrawal.
In June 2011, Newman cashed in the $300,000 CD held at Chambers and opened a savings account in Pharis’ name at First National, before withdrawing $85,000 for her own use between June and November 2011.
The missing money was discovered in December 2011, when Pharis became concerned she wasn’t receiving bank statements from First National, according to court documents.
While Newman admits embezzling more than $300,000 from Pharis, she disputes the government’s claim the amount was almost $560,000.
According to an auditor at First National Bank, all of Pharis’ funds have been recovered, minus about $8,800 in lost interest and early withdrawal penalties and about $2,500 in legal expenses, according to court documents.
In addition to requesting Holmes sentence Newman to between 41 and 51 months in prison, in the memorandum, Jenner said she will also presented evidence Newman owes a little more than $18,000 in restitution for lost interest, early withdrawal penalties, attorney’s fees and other expenses incurred by Pharis’ estate.
Pharis died March 25, less than a week after Newman pleaded guilty.
A representative of Pharis’ estate will testify Pharis never recovered from Newman’s betrayal, which caused her heartbreak and depression that severely diminished her quality of life, according to the memorandum.
Newman is free on a signature bond while she awaits sentencing.

Thursday, July 25, 2013

Bank Employee Arrested for Embezzlement in Mississippi

An Oktibbeha County bank employee has been arrested for embezzling from her employer, announced Attorney General Jim Hood today.
Ashley Smith, 28, of Columbus was arrested today by investigators with the Attorney General's Public Integrity Division following indictment by an Oktibbeha County Grand Jury on one count of embezzlement.  The indictment charges Smith with embezzling over $30,000 while working for Cadence Bank in Starkville.   
Smith was booked into the Oktibbeha County jail and released on bond.  If convicted, she faces up to 10 years in prison.
As with all cases, the defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
The case is being investigated by Perry Tate of the AG's Public Integrity Division and will be prosecuted by Assistant Attorney General Stan Alexander.

Tuesday, July 23, 2013

A Kenosha, Wisconsin man is sentenced to 35 months in prison for bank fraud

James Scalzo, a 46-year-old man of Kenosha, has been sentenced to 35 months in prison for bank fraud and money laundering schemes.
In January of 2013, Scalzo pled guilty to evidence charging him with a bank fraud scheme and money laundering, and he faced up to 30 years for the bank fraud offense and 20 years on the laundering count.
Between April1, 2008 and October 31, 2009, while employed as a bank officer at Fox River State Bank in Burlington, Wisconsin, and then Consumer's Credit Union in Round Lake Beach, Illinois, Scalzo originated and approved multiple fraudulent loans. He then directed money to be taken from the loans and transferred to accounts in which he had a personal interest.
Some of the loan funds were applied against earlier loans in order to conceal the fraud, with more than $1.4 million in loan funds being involved.
The case not only was an abuse of trust of the financial institutions that employed Scalzo but also caused personal and financial hardship to unknowing citizens. Among the victims was a couple whose home Scalzo had pledged as collateral for one of the fraudulent loans and then allowed to go into foreclosure.
In addition to his 35 months in prison, Scalzo was also ordered to serve three years' supervised release following his time in prison and to pay $200 in special assessments.

Former owner of failed Premier Bank arrested, charged with fraud in Illinois

The former chairman of a failed Wilmette bank and his wife, along with two former board members, have been arrested and charged with defrauding the federal government and misappropriation of funds.
Dr. Zulfikar Esmail, 70, owner and former chairman of Premier Bank, was arrested by state police July 10 at his home in Evanston and charged with being the organizer of a continuing financial crimes enterprise in conjunction with his activities at the bank, according to a spokeswoman for Illinois Attorney General Lisa Madigan. If convicted on the felony charges, he would face mandatory jail time of six to 30 years.
Also arrested and charged were his wife, Shamim Esmail, 65, who sat on the Premier Bank board, and former directors Robert McCarty, 51, of Geneva, and William Brannin, 53, of Chicago, the spokeswoman said. They face lesser felony charges, which don't carry mandatory prison time but are punishable by four to 15 years in prison, she said.
Dr. and Ms. Esmail were released on a collective $850,000 bond. Messrs. McCarty and Brannin were released on bonds of $400,000 and $350,000, respectively.
The four were charged for their alleged roles in what Ms. Madigan's office described as a “long-running fraud scheme to defraud Premier Bank, the U.S. Treasury Department and the Federal Deposit Insurance Corp.”
Added Ms. Madigan's spokeswoman, “As part of the scheme, the defendants had access to and helped to misappropriate millions of dollars in bank funds.”
The spokeswoman said more details of the case would be announced on Aug. 6, when the defendants are scheduled to be arraigned in Cook County Circuit Court.
A Chicago lawyer representing the Esmails and Mr. Brannin declined to comment. A lawyer representing Mr. McCarty also declined to comment, saying he didn't have enough information about the nature of the allegations to respond.
Dr. Esmail, a physician, launched Premier Bank in 2000, and the lender grew to a peak of $350 million in assets in 2009. The bank had $269 million in assets when it failed in March 2012. The failure wiped out $6.8 million in bank bailout funds it had received from the Treasury Department as part of the Troubled Asset Relief Program.
Premier Bank not only obtained TARP funds in 2009, but the federal government refinanced the bank into a cheaper bailout program in 2010 that it had made available to designated community development financial institutions — lenders serving low-income or underserved communities.
The March 2012 failure of Premier Bank is projected to cost the FDIC's insurance fund an estimated $64.2 million, according to the agency's most recent estimates.
The bank was a defendant in a 2012 lawsuit filed in Cook County Circuit Court by George Dernis, owner of the Michael's Fresh Market chain of grocery stores. Mr. Dernis and his company had borrowed a total of $22 million from Premier Bank, a remarkable 14 percent of the bank's total loans as of Dec. 31, 2011.
In his complaint Mr. Dernis accused Dr. Esmail, among other things, of pressuring him to give Dr. Esmail and his children equity stakes in some of his stores as a condition of obtaining credit.
Five of the eight stores formerly owned by Mr. Dernis are operating under new ownership after emerging from Chapter 11 bankruptcy. In addition, Mr. Dernis filed for personal bankruptcy. His lawsuit against the bank and the Esmails still is pending, but the FDIC as receiver is now the defendant in the bank's place.
“I lost everything,” Mr. Dernis said Friday. “I'd really like to apologize to my wife and my family and my creditors for everything they went through.

Thursday, July 18, 2013

4 Former Employees Charged In Staged Kansas Bank Robbery

Four western Kansas women have been indicted, accused of embezzling from the bank where they worked and staging a robbery to cover the thefts.

On Thursday, an indictment was unsealed charging four former employees of Western State Bank in Ulysses with the following crimes:

-32-year-old Amber Gutierrez of Ulysses is charged with two counts of embezzlement by a bank employee and one count of bank robbery.
-32-year-old Hattie Wiginton of Ulysses is charged with two counts of embezzlement by a bank employee, one count of bank robbery and one count of making a false statement to the FBI.
-28-year-old Ashley Cravens of Ulysses is charged with two counts of embezzlement by a bank employee and one count of bank robbery.
-59-year-old Linda Wise of Ulysses is charged with one count of embezzlement by a bank employee.
The indictment alleges that from 2008 until July of 2010, Gutierrez Wiginton and Cravens embezzled more than $84,000 from the bank. The three then allegedly staged a robbery of the bank, taking an undetermined amount of cash. Wiginton reportedly told the FBI that that two men robbed the bank, and one spoke with a Hispanic accent.

The indictment continues that Gutierrez, Cravens and Wise embezzled an additional $24,000 from the bank from late 2010 until March of this year. They allegedly created falsified cash deposit slips and deposited funds into their own accounts.

If convicted, they face up to 30 years in federal prison and a fine up to $1,000 on each count of theft, 25 years and a fine up to $250,000 on the bank robbery charge and up to 5 years and a fine up to $250,000 for making a false statement to the FB

Wednesday, July 17, 2013

Spirikaitis Home Found Empty; Former CEO Wanted by Authorities in Cleveland

Alex Spirikaitis, former CEO of the liquidated Taupa Lithuanian Credit Union, is on the lam.

Local Cleveland news outlets are now reporting that a police standoff overnight at Spirikaitis’ home was in vain, because the FBI discovered the home was empty.

 FBI Special Agent Vicki Anderson told the Cleveland Plain-Dealer it's unclear if Spirikaitis, who has a warrant for his arrest for fraud that led to the $23 million credit union’s failure, was ever home.

The standoff began after police attempted to arrest Spirikaitis on Tuesday night. Anderson said a person at the home told police he was there but would not surrender.

Authorities are now searching for Spirikaitis and a reward is being offered for information that will help lead to his arrest.

"We will continue the investigation and hope he decides to turn himself in and make it a lot easier on everyone," Anderson told the Plain Dealer.

The Ohio Department of Financial Institutions made the decision to liquidate the credit union after determining it was insolvent and had no prospect for restoring viable operations.

The DFI named the NCUA liquidating agent and federal officials seized the credit union Friday.

Fraud was suspected after a review of the 1,154-member credit union’s financial performance reports showed a seemingly healthy credit union with 10.31% net worth, 0.78% delinquencies and no charge offs as of March 31.

However, cost of funds was reported to be 0.87%, much higher than the peer average of 0.36%.

The failed credit union’s website revealed it was not paying above average dividends to members, and liquidity was not an issue, indicating the credit union did not have outstanding borrowings that were driving up cost of funds.

The Cleveland-based credit union reported a considerable amount of cash on its books, more than $15 million as of March 31, with just $729,595 in investments. Total loans were $7.4 million during that period.

Sentencing For Former Charleston Bank Executive Wednesday

The former executive of a Charleston-based Chase Bank could be heading to prison for embezzlement.
Mark Alan McCoy, of Charleston, will be sentenced at 11 a.m. Wednesday in U.S. District Court in Charleston by U.S. District Judge Irene Berger for embezzling more than $500,000 from his employer.
The 46 year old worked as the vice president of private client banking services at the bank's Charleston branch from September 2008 until June 2012.
While employed, McCoy stole around $532,395 belonging to Chase Bank from approximately nine separate personal and corporate bank clients’ accounts.
From November 30, 2009 through April 19, 2012, he created cashier’s checks for himself or would use the proceeds from the original cashier’s checks to create additional unauthorized checks.
McCoy previously pleaded guilty in March to embezzlement by a bank officer. He faces up to up to 30 years in prison and a fine of up to $1 million for the crime.

Former Bank CEO Sentenced for Money Laundering and Bank Fraud in Mississippi

Larry Barnette Hill, 58, of Meadville, Mississippi, was sentenced in federal court today to 78 months in federal prison, followed by five years of supervised release, for money laundering and bank fraud, announced U.S. Attorney Gregory K. Davis and FBI Special Agent in Charge Daniel McMullen. Hill was also ordered to pay $1,243,703 in restitution to People’s Bank of the South.

From 2004 through 2012, while serving as CEO of People’s Bank of the South in Bude, Mississippi, Hill fraudulently withdrew money from the bank’s Payroll Clearing Account and deposited those funds into the bank accounts of his family members and into a “shell” bank account he created for his own use. He also used the bank’s credit card to pay personal expenses without the bank’s authorization, and he used third-party checks issued in the name of People’s Bank for his own personal benefit, including making payments on a personal loan at another bank.

Hill concealed his fraudulent activities by creating false general ledger tickets at the bank that appeared to be for bank expenses and inflating the bank’s budget each month in order to cover up his embezzlement.

This case was investigated by the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation’s Office of Inspector General. It was prosecuted by Assistant U.S. Attorney Mike Hurst

Tuesday, July 16, 2013

Former bank manager charged with embezzlement in Kansas

A former branch manager at a Garden City bank has been charged with embezzling thousands of dollars from the bank.

Prosecutors charged Sheri Green, 52, with one count of misapplication of bank funds Tuesday. The indictment alleges that she stole more than $99,000 from Landmark National Bank from Aug. 16, 2012, to Dec. 26, 2012.

If convicted, she faces a maximum penalty of 30 years in federal prison and a fine up to $250,000.

Monday, July 15, 2013

Bank Employee Charged with Bank Fraud in McAllen, Texas

Edna Edith Sepulveda, 39, of McAllen, has surrendered to federal authorities following the return of an indictment alleging she perpetrated more than $200,000 in bank fraud, United States Attorney Kenneth Magidson announced today.

The indictment was returned July 9, 2013, and she made her initial appearance today, at which time she was permitted release upon posting bond.

According to the indictment, Sepulveda was a former employee of Inter National Bank of McAllen. Beginning in January 10, 2006, she allegedly devised a scheme to take money from Inter National Bank by fraudulent means. She then placed the funds into the accounts of her parents allegedly intended for her own personal use, according to the allegations. The total amount of loss to Inter National Bank is $232,351.19.

If convicted, Sepulveda faces up to 30 years in federal prison, as well as a $1 million fine.

This case is being investigated by the FBI with the cooperation of Inter National Bank. Assistant United States Attorney Jason C. Honeycutt is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless convicted through due process of law.

Bank employee faces embezzlement, forgery charges in Dickenson County, Virginia

An employee at First Community Bank in Clintwood has been indicted on embezzlement and forgery charges.

Kimberly Cook, of Clintwood, was arrested late last week and charged with three counts of embezzlement under $200 and three counts of forging coin and bank notes, according to online court records. According to the records, the incident which led to her arrest happened in June 2011.

"She's charged with using her position as a bank teller to embezzle money from customers," said Dickenson County Commonwealth's Attorney Joshua Newberry.
Cook's trial has been set for Sept. 12, court records show. She has no prior criminal record in the county.
Ginger Salt, the bank's chief marketing officer, said she couldn't comment on the status of Cook's employment with the bank.

Thursday, July 11, 2013

Columbia Woman Pleads Guilty to Mortgage Fraud, Embezzlement in Missouri

A Columbia woman pleaded guilty in federal court Thursday to charges of bank fraud and money laundering, which were part of a $576,000 mortgage fraud and embezzlemet scheme at the title company where she was employed.

Terri Lynn Johnson, 48, of Columbia, pleaded guilty before U.S. Magistrate Judge Matt J. Whitworth to the charges contained in a Dec. 13, 2012 federal indictment.

Johnson was hired for a clerical position with Guaranty Land Title Company in 2001, and was eventually promoted to become the branch manager of the Fulton, Mo. office after the company was acquired by Landchoice Company, LLC. She remained in that position until her termination in 2008.

Johnson admitted that she engaged in a $300,000 mortgage fraud scheme while she was employed as the Fulton branch manager. Johnson refinanced the mortgage on her residence twice. As a result of the false and fraudulent information provided by Johnson, two banks approved mortgage loans, one for $175,000 and the other for $125,000. The combination of those two loans clearly exceeded the appraised value of Johnson's residence, which was used to secure both loans.

Johnson also admitted that she embezzled $276,173 from Landchoice. She diverted income checks from Landchoice into a bank account that had been opened for Guaranty Land Title Company and which her employer didn't know existed. She also diverted escrow funds which had been obtained by Landchoice for loan closings into that account.

Johnson then wrote checks to herself which she deposited into her personal checking account. She wrote checks totaling approximately $59,465 payable to herself, as well as checks to her personal business, which totaled approximately $12,500. Johnson also wrote checks believed to be for her personal use totaling approximately $19,916. In addition, she utilized a debit card issued for the account, which she used to access $184,292 for her personal benefit. The total personal benefit realized by Johnson from this embezzlement scheme is estimated to be approximately $276,173.

Under federal statutes, Johnson is subject to a sentence of up to 40 years in federal prison without parole. A sentencing hearing will be scheduled after the completion of a pre-sentence investigation by the U.S. Probation Office.

Southlake Man Sentenced to 24 Months in Federal Prison for Role in Bank Fraud Conspiracy in Texas

Jason Dvorin, 45, of Southlake, Texas, was sentenced this morning by U.S. District Judge Reed C. O’Connor to 24 months in federal prison and ordered to pay $111,639 in restitution, following his conviction at trial in February 2013 on one count of conspiracy to commit bank fraud. Judge O’Connor ordered that Dvorin surrender to the Bureau of Prisons on September 12, 2013. Today’s announcement was made by U.S. Attorney Sarah R. SaldaƱa of the Northern District of Texas.

Dvorin entered into an agreement with Chris Derrington, the vice president of Pavillion Bank, located on West Campbell Road in Richardson, Texas, to deposit worthless checks in return for immediate access to the bank’s funds. Dvorin would bring in worthless credit card checks, or checks drawn on a closed account, and present them to Derrington for deposit. Knowing the checks were worthless, Derrington gave Dvorin immediate access to the bank’s funds. As soon as one worthless check was returned, Dvorin would deposit another worthless check. This pattern continued over the course of five years and resulted in 224 fraudulent deposits by Dvorin and the Derrington. By the time the scheme was uncovered, Pavillion bank sustained a loss in excess of $300,000.

Derrington, 61, of Dallas, was charged in a separate case with the same offense and pleaded guilty to that charge in May 2012. He was sentenced in March 2013 to a five-year term of probation and ordered to pay more than $778,000 in restitution.

Today’s announcement is related to efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated, and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices, and state and local partners, it is the broadest coalition of law enforcement, investigatory, and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state, and local authorities; addressing discrimination in the lending and financial markets; and conducting outreach to the public, victims, financial institutions, and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,900 mortgage fraud defendants. For more information on the task force, visit

The cases were investigated by the FBI and the FDIC Office of Inspector General. Assistant U.S. Attorneys Mindy Sauter and Michael Elliott prosecuted.

Wednesday, July 10, 2013

Former Union Savings Bank manager indicted in $675,000 embezzlement in Ohio

A former Union Savings Bank manager, accused of pilfering at least $675,000 from an elderly couple who were her clients, now faces federal charges of embezzlement, money laundering and filing a false tax return.
All of the charges against Diane Elizabeth Niehaus are felonies. The complaint against her was filed in March but sealed until late June, according to federal court records.
Niehaus, 39, is currently free, though an arrest warrant was executed March 11, according to records.
Niehaus resigned from the bank Sept. 22, 2011, three days after the Dayton Daily News published a story about her relationship with Jesse and Dorothy Cline, a Beavercreek couple whom Niehaus befriended after she met them at the bank’s Centerville branch. After Jesse’s death in March 2011, Dorothy sued Niehaus and her husband Paul, stating they had taken money from the Clines.
To settle the lawsuit, the Niehauses agreed in May 2012 to transfer $366,000 in a cash box to Cline’s attorney, and to transfer ownership of their home on Riva Court in Beavercreek to the bank, according to an affidavit of FBI Special Agent Michael R. Bush. Cline’s lawsuit claimed the Niehauses used the Clines’ money to purchase that home.
Under the settlement, the bank paid $834,066 to the estate of Dorothy Cline, who has Alzheimer’s disease and lives in an assisted care facility, according to Bush’s affidavit, which was filed with the complaint.
Attorney Craig Matthews, who represented Cline in her lawsuit, said he could not discuss the details of the settlement, but added that “we’re pleased to have brought this matter to the attention of the federal agencies through our lawsuit.”
Tom Anderson, the assistant federal public defender assigned to represent Niehaus, could not be reached for comment Monday.
Bush’s affidavit states that, between October 2007 and October 2008, Niehaus made more than $12,000 in unauthorized withdrawals from the accounts of people identified only by the initials JF and RF. Niehaus told RF that another employee had stolen the money and explained how it was done, but she “had actually explained her own embezzlement scheme to RF,” Bush wrote.
Niehaus used some of the Clione’s money to replace the missing money, Bush wrote.
The Clines’ daughters told Bush that, during late 2007, Niehaus befriended the Clines, assisting them with all of their banking activities. Jesse was medicated for several conditions, including congestive heart failure and diabetes, while Dorothy had dementia and could no longer balance her checkbook or cook meals. On Aug. 25, 2010, Niehaus became power of attorney for both of the Clines, Bush wrote.
Bank employee Venus Jackson told Bush that the Clines were not present during each of the time that she notarized documents for them and that she did not read the documents. Miami Valley Hospital records show that Jesse Cline was in the intensive care unit the day the power of attorney documents were notarized, Bush wrote.
An affidavit filed in 2012 by IRS Agent Laurel Vant stated that Niehaus and her husband both worked at Fifth Third Bank in Pickerington, Ohio, when she “caused her husband to be rewarded for loans that he had not referred” and both were fired Jan. 6, 2004 for “self-dealing and embezzlement.”
Two years later, Niehaus’ father called Fifth Third and asked about a $32,000 loan in his name for a 2003 BMW 850. He told bank officials he had never applied for the loan nor owned the car. Diane Niehaus was making the payments, according to Vant’s affidavit.
Niehaus started using her middle name, Elizabeth, when she started working at Union Savings Bank in 2006, according to Vant’s affidavit

Tuesday, July 9, 2013

Springfield, Missouri Woman Among 12 Indicted for $650,000 Embezzlement

A UMB Bank employee along with 11 friends and family members has been indicted by a federal grand jury for embezzling more than $650,000 in a bank fraud conspiracy.

Lisa L. Taylor, 53, Kara L. Williams, 32, Shameeka N. Whitehead, 30, Rodney C. Austin, 48, Johnnie L. Coleman, 51, Roshana A. Franklin, 21, Antonio O. Malone, 25, and Ralph Broadus, 58, all of Kansas City, Mo., William D. Moore, 23, of Grandview, Mo., Stephen A. Combs, 26, and Geoffrey N. King, 29, both of Olathe, Kan., and Lakisha S. Weathers, 28, of Springfield, Mo., were charged in a 44-count indictment that was returned under seal by a federal grand jury in Kansas City, Mo., on June 20, 2013.

That indictment was unsealed and made public upon the arrests and initial court appearances of several defendants on Monday, July 8, 2013.

The federal indictment alleges that Taylor, who was employed by UMB Bank from May 2006 until October 2010, used her position to generate 377 fraudulent bank checks totaling $650,659, payable to her co-defendants and others in a fraud scheme that lasted virtually the entire time she worked at the bank.

According to the indictment, Taylor was employed at UMB as a closing account specialist. Taylor's duties included collecting amounts that were charged off when a customer's account was closed.  Occasionally a closed account would receive a deposit via an automatic deposit or otherwise, after it had been closed. Taylor's job duties required her to request a bank check to refund any deposit amount in excess of any charged off amount in the closed account. Taylor was required to submit this request for approval of a bank check to a bank officer, who would approve issuance of a bank check for the refund amount which would then be mailed to the customer's last known address.

Taylor allegedly used her position at the bank to generate fraudulent UMB checks made payable to her friends, family members and others, including her codefendants. She submitted false and fraudulent requests for approval of the bank checks to UMB bank officers, the indictment says. Conspirators allegedly kept a portion of the funds from the UMB bank checks and returned a portion of the funds to Taylor, Williams, Whitehead or others.

Each of the 12 defendants is charged with participating in a bank fraud conspiracy from May 2006 until October 2010. Various defendants are also charged in 43 additional counts of bank fraud related to cashing fraudulent checks.

Dickinson cautioned that the charges contained in this indictment are simply accusations, and not evidence of guilt. Evidence supporting the charges must be presented to a federal trial jury, whose duty is to determine guilt or innocence.

This case is being prosecuted by Assistant U.S. Attorney Jess E. Michaelsen. It was investigated by the U.S. Secret Service.

Friday, July 5, 2013

Mount Pleasant, South Carolina bank teller sentenced to prison for embezzling over $720,000 from Bank of America

At age 60, Michele Gentry was supposed to be looking forward to retirement after raising two children.

The Mount Pleasant woman had been a successful mother, by many accounts. Her daughter became a schoolteacher. Her son graduated from law school and just passed the bar exam. It was supposed to be a time to celebrate.

Instead, an impending date looms over Gentry and her family. In the next two to three months, Gentry will be sent to a federal prison to begin a one-year sentence for embezzling more than $720,000 over 15 years from Bank of America. She worked at a Mount Pleasant branch as a teller.

On Tuesday, Gentry stood before a federal judge in a Charleston courtroom to be sentenced after pleading guilty in February. Dressed in a black suit, Gentry’s hand shook as she placed it on the Bible and pledged to tell the truth.

Fifteen years of deception got her there.

“She said she was relieved she no longer had to live as two separate people,” her son Aaron told the judge. She told him that when she confessed her crimes, he said.

Her son and her husband, Jasper, were among more than 50 people who filled every row inside the courtroom Tuesday. All were there to support her.

Gentry and her husband have been married for 41 years. They started as high school sweethearts. As he described the life they had led, Jasper Gentry’s voice cracked.

“If I knew 41 years ago what I know now, I would do it all over again,” he told the judge as he struggled to get the words out.

In the last two years, though, Jasper Gentry said he and his wife have had to borrow money, and the “money intended for retirement was redirected to restitution.”

She will have to pay back the $720,000 she pilfered from the bank. Gentry was the vault teller who would move money from the vault to the teller drawers. Between 1995 and 2011, she stole cash in $500 to $2,000 increments, according to prosecutors.

Gentry would replace the cash she would take with fake cash-in-transit tickets, inter-bank ledger entries and other paperwork to hide the embezzlement, prosecutors have said.

It went on until 2011, when Gentry called in sick to work one day and her branch manager discovered the embezzlement, prosecutors said. She was fired that August and confessed to the bank investigator and authorities.

Her family and friends told the judge during the sentencing hearing that Gentry expressed extreme remorse ever since she had come clean. Her church minister also told the judge about her time as a Bible school teacher at Mount Pleasant Church of Christ.

Her attorneys, Jerry Theos and Alan Toporek, hoped her remorse, community involvement and cooperation would be enough to keep Gentry, who has no prior criminal record, out of prison.

They asked U.S. District Judge Richard Gergel to sentence Gentry to probation. Assistant U.S. Attorney Rhett DeHart argued in court that probation would be “unjust.” “She had many chances to reflect on what she was doing and stop it,” he told Gergel. “She was embezzling until she got caught.”

DeHart asked Gergel to consider the sentence outlined in the federal guidelines for this crime — 27 to 33 months in prison.

Gergel didn’t grant either of their requests and sentenced Gentry to 12 months and one day in prison, and five years of supervised release, to include six months of home detention.

In explaining his decision, Gergel called this a calculated and methodical crime.

Michele Gentry said nothing during the hearing that lasted more than an hour. Instead, one of her attorneys read a letter she had written to her former co-workers in May.

“I wish I could relive the past 16 years,” the letter stated. “It started with such small amounts and escalated to such high amounts, I couldn’t pay it back.”

W.Va. bank manager who stole mostly from senior has pleaded guilty to embezzling $247K

A former manager of Huntington National Bank's Weston branch has pleaded guilty to embezzling more than $247,000, mostly from senior citizens.

Fifty-one-year-old Deborah Radcliff of Weston appeared Wednesday before U.S. Magistrate John Kaull in Clarksburg.

U.S. Attorney William Ihlenfeld says she pleaded guilty to embezzlement and one count of illegally structuring funds between July 2011 and November 2012.

Investigators say Radcliff cut cashier's checks various accounts then forged depositor's names and cashed them.

Ihlenfeld says the victims were older, between 56 and 90 years old. Only one was under 64.

Ihlenfeld says Radcliff made sure the checks were for less than $10,000 and therefore not subject to a reporting mechanism. She also cashed them on different days.

Radcliff faces up to 40 years and a $1.5 million fine when sentenced.

As part of the plea bargain, Assistant U.S. Attorney John C. Parr agreed to recommend a lesser sentence if he is convinced that Radcliff accepts responsibility for her actions.
The court is not bound by the government’s recommendations, according to the plea agreement.
Radcliff was branch manager of the Lewis County bank during the embezzlement, which occurred between July 1, 2011, and Nov. 5, 2012, according to court documents.
The amount embezzled came to $247,249, and the depositors whose accounts were affected ranged in age from 56 to 90, according to the documents.
Radcliff used her position “to issue or direct to be issued cashier’s checks from funds withdrawn from depositors’ accounts issued in the name of the depositor,” a federal grand jury found in May.
She “would take possession of the cashier’s check, forge the name of the depositor and cash the checks for her own personal benefit,” grand jurors alleged.
The structuring count alleges that Radcliff artificially kept bank transactions under $10,000 to evade reporting requirements.

Monday, July 1, 2013

Former StellarOne bank teller ordered to pay $16,700 in Virginia

 A former bank teller was ordered to pay StellarOne $16,700 in restitution in exchange for her guilty plea Friday to a misdemeanor charge of embezzlement, court records show.

Betty F. Edwards, 44, of Waynesboro, is the former head teller at the bank on Lucy Lane in Waynesboro.

The Waynesboro Police Department reported Edwards’ arrest last week.

While Edwards was under investigation, her attorney, Frankie Coyner, and assistant Commonwealth’s Attorney David Ledbetter, reached a plea agreement that brought the probe to a swift end on Friday.

Authorities officially charged Edwards with a felony count of embezzlement, but she was allowed to plead to an amended misdemeanor charge while paying the bank back in full. The entire proceeding took place Friday morning.

Capt. Kelly Walker said it’s unusual to have a suspect charged and adjudicated the same day, but it’s “not unheard of,” and that he’s seen it happen a few times during his law enforcement career.

Coyner did not return a phone call seeking comment.

Court records show the thefts took place between April 2008 and October 2011, when financial discrepancies at the bank were picked up by an audit, according to Ledbetter.

Ledbetter said he opted for a plea deal in the case because pursuing felony charges against Edwards might have proved difficult.

“It would have been an exceptionally complex case to present at trial,” he said.

The prosecutor also noted that StellarOne supported the plea deal.

“The victim was made whole, which is unusual in an embezzlement case,” Ledbetter said.

Asked why Edwards stole from the bank, Ledbetter replied, “I can only speculate as to what her motive was.”

Edwards, who has no criminal history, was given a one-year jail sentence, which was suspended. She has also been placed on one year of unsupervised probation.

Bank Employee Pleads Guilty in Large Tax Refund Scheme in New York

U.S. Attorney William J. Hochul, Jr. announced today that Graciela Serra, 36, of Rochester, New York, pleaded guilty before U.S. District Court Judge David G. Larimer to conspiracy to commit tax fraud in connection with a large nationwide tax refund scheme. The charge carries a maximum penalty of 10 years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that from January 29, 2011 to October 31, 2011, Serra was involved in a scheme to obtain income tax refunds by the filing of fraudulent federal income tax returns with the Internal Revenue Service. Specifically, stolen identities were utilized to file the fraudulent federal income tax returns, and the wages and related tax withholdings reported on the federal income tax returns were fabricated in order to obtain the refunds. Most of the returns were filed in the names and Social Security numbers of individuals residing in Puerto Rico without their knowledge. The refund checks issued as a result of the fraudulent returns were sent to various addresses in Rochester and other locations in the country.

Serra, while a teller at the Woodforest Bank on Hudson Avenue in Rochester, used her position at the bank to cash several of the fraudulent tax refund checks for other participants in the scheme who brought the fraudulent checks to her at the bank. The defendant cashed the checks knowing they were in the names of individuals other than the individuals who brought the checks to the bank. The defendant was paid a fee for cashing the checks.

“Using one’s position of trust to facilitate a crime is something our office takes very seriously,” said U.S. Attorney Hochul. “In this case, the defendant abused her position as a bank teller to cash fraudulent checks issued by the Internal Revenue Service. Such fraud against the government in reality impacts all Americans.”

The plea is the culmination of a joint investigation on the part of the Federal Bureau of Investigation, under the direction of Acting Special Agent in Charge Richard M. Frankel, and the Internal Revenue Service, under the direction of Toni M. Weirauch, Special Agent in Charge.

Sentencing is scheduled for September 20, 2013 before Judge Larimer.