Fourteen years after allegedly committing fraud at the bank for which he was a director, an attorney has been found guilty of five counts in federal court, the inspector general of the federal bank deposit insurance agency said Thursday.
The attorney and former director now faces a maximum of 125 years in prison, the Office of Inspector General (OIG) for the Federal Deposit Insurance Corp. (FDIC) said. He was found guilty of the five counts July 12 following a one-week trial before U.S. District Judge George B. Daniels. Sentencing is set for Nov. 29.
According to the OIG (and the Department of Justice’s U.S. Attorney for the Southern District of New York), Mendel Zilberberg, 65, of Monsey, N.Y., was convicted of: conspiracy to commit bank fraud (which carries a maximum sentence of 30 years in prison); bank fraud (which carries a maximum sentence of 30 years in prison); conspiracy to make false statements to a bank (five years); making false statement to a bank, (30 years); and misapplying bank funds (30 years).
The OIG said Zilberberg allegedly conspired in 2009 with other persons to obtain a fraudulent loan from Park Avenue Bank of New York, N.Y. “Knowing that the conspirators would not be able to obtain the loan directly, the conspirators recruited a straw borrower (the ‘Straw Borrower’) to make the loan application,” the OIG said. “The Straw Borrower applied for a $1.4 million loan from the Bank on the basis of numerous lies directed by Zilberberg and his co-conspirators.”
The OIG alleged that, as a director, Zilberberg used his position at the bank to ensure that the loan was processed promptly. “Based on the false representations made to the bank and Zilberberg’s involvement in the loan approval process, the bank issued a $1.4 million loan to the Straw Borrower, which was quickly disbursed to the defendants through multiple bank accounts and transfers.”
In total, the OIG alleged that Zilberberg received more than approximately $500,000 of the loan proceeds. The remainder of the loan, the agency said, was split between other conspirators. The Straw Borrower, the OIG said, received nothing from the loan which ultimately defaulted, resulting in a loss of more than $1 million.
Park Avenue Bank, according to the OIG, “collapsed just months after Zilberberg defrauded it.”
Attorney And Former Bank Director Convicted At Trial Of Bank Fraud