Recently in Bank Fraud Category

Two Stars of "Real Housewives of New Jersey" Indicted for Federal Fraud and Tax Charges

July 30, 2013, by The McKellar Law Firm, PLLC

According to a press release from the Department of Justice, Teresa and Joe Giudice were indicted by a federal grand jury in a 39-count indictment for a multitude of federal crimes, including mail fraud, wire fraud, bank fraud, making false statements on loan applications, bankruptcy fraud, and failure to file tax returns. The New Jersey couple regularly appear on the Bravo TV show "Real Housewives of New Jersey."

Giudice.jpg

According to the Indictment, the Giusepe's are accused of the following acts:

  • From 2001 to 2008, the Giuseppe's allegedly committed mail and wire fraud by submitting fraudulent loan and mortgage applications, along with false supporting documentation. In particular, they are accused of falsely stating that they were "employed and/or receiving substantial salaries when, in fact, they were either not employed or not receiving such salaries."
  • In 2001, Teresa Giudice applied for a mortgage loan of $121,500, and she allegedly falsely claimed she was employed as an "executive assistant," and she provided fake W-2 forms and fake paycheck stubs which she claimed were issued by her employer. The Government alleges that Mrs. Guidice's claims related to this mortgage loan were false.


  • In 2009, the Giudices filed a Chapter 7 bankruptcy protection in the U.S. Bankruptcy Court in Newark, New Jersey. The Guidice's, along with anyone else who files for bankruptcy protection, were required to disclose their assets, income, and liabilities, among other things, to the United States Trustee. The Government claims that the Giudice's intentionally "concealed businesses they owned, income they received from a rental property, and Teresa Giudice's true income from the television show 'The Real Housewives of New Jersey,' website sales, and personal and magazine appearances." The indictment also argues that the Giudice's concealed their anticipated increase in income from the upcoming season of the "Real Housewives of New Jersey." As a result of these alleged actions, the Giudice's are charged with committing bankruptcy fraud for concealing and making false oaths and declarations about the assets and income during their bankruptcy case.


  • The Indictment also alleges that during tax years 2004 through 2008, Giuseppe "Joe" Giudice received income totaling $996,459, but did not file tax returns for those years.

The Guidice's are looking at a potentially substantial sentence if convicted of these crimes, and are specifically looking at the following maximum punishments:


  • Conspiracy to commit mail and wire fraud - up to 20 years in prison and a maximum $250,000 fine.

  • Bank fraud and loan application fraud counts - each carry a maximum of 30 years in prison and a $1 million fine.

  • Bankruptcy fraud counts each carry a maximum penalty of 5 years in prison and a $250,000 fine.

  • Failure to file a tax return counts each carry a maximum penalty of one year in prison and a $100,000 fine.

Two Atlanta Area Men Charged in Tennessee with Bank Fraud & Aggravated Identity Theft

March 23, 2012, by The McKellar Law Firm, PLLC

According to the U.S. Attorney's Office for the Eastern District of Tennessee, a joint investigation by the U.S. Secret Service, Chattanooga Police Department, East Ridge Police Department, Metro Nashville Police Department, and Dalton, Georgia Police Department lead to a 39 count indictment against Chris Svetlinov Dragiev, of Kennesaw, Georgia, and Atanas G. Georgiev, of Atlanta, Georgia. The indictment included conspiring to use and possess counterfeit bank ATM cards, bank fraud, and aggravated identity theft.

atm-machine.jpg

The indictment alleges that the two conspired to obtain money from Regions Bank customers by using a "skimming" device attached to an ATM in East Ridge, Tennessee. Using the "skimmer" and Wal-Mart gift cards, the two were able to record the account and PINs onto the blank gift cards and use them to withdraw cash from various ATMs in Tennessee, North Carolina, and South Carolina. In October, the two were found in possession of 39 of these fraudulent ATM cards, as well as $3920 cash.

Dragiev and Georgiev potentially face up to 215 years imprisonment for counts 1-21, and 32 years imprisonment for counts 22-39. The two may also face severe fines, restitution and forfeitures in excess of $6,000,000.

6th Circuit Vacates Conviction Due Partly to Prosecutor's Misconduct

March 7, 2012, by The McKellar Law Firm, PLLC

In United States v. Timothy Parkes, the Sixth Circuit Court of Appeals overturns a conviction in part due to prosecutorial misconduct based on statements by the prosecutor in closing argument. Parkes was originally convicted in Chattanooga, Tennessee, for ten counts of bank fraud.

1258644_old_building.jpg

While the Parkes case has a few interesting tidbits, the most interesting point relates to the conduct of the prosecutor in closing arguments. The Assistant U.S. Attorney concluded his rebuttal argument "with a wholly inappropriate statement to the jury," in which he warned that an acquittal would "let [Parkes and co-Defendant Mourier] keep the
$4 million." The Court writes that "The prosecutor made this statement even though he knew--and had earlier moved the district court to prevent the admission of evidence establishing--that Parkes and Mourier had already paid off most of the money that Remington had borrowed from Benton Bank."

The prosecutor stated in his rebuttal closing argument:

Your Government just wants you to do what is right. And if it's right to acquit [Parkes and Mourier], you do it, you let them keep the $4 million, you tell the government, "Shame on you for persecuting these poor people."

Such a statement was improper because a) the prosecutor knew the statement was false because Parkes had already repaid approximately $3.2 million to the bank, and b) the repayment of any monies (or failure to repay any monies) to the bank "would not be a reason to convict [Parkes] on the counts charged in the indictment." Ironically, prior to this closing argument, the prosecutor had moved to exclude any evidence that Parkes had repaid any monies to the bank. Every time Parkes attempted to introduce evidence of the repayment in trial, the prosecutor objected.

The Court concluded:

Yet incredibly, at the very end of the case, in the final words of an argument to which Parkes had no opportunity to respond, the prosecutor suggested--contrary to the very evidence the government had fought so hard to exclude--that Parkes would keep the Bank's money unless the jury found him guilty. All of which points us to one conclusion: The prosecutor's improper remark was not only misleading and highly prejudicial, it was deliberately made.

Fortunately, the Sixth Circuit reversed the decision of the trial court and vacated Parkes' conviction.

Bank Teller Indicted for Bank Fraud and Identity Theft in Federal Court

August 3, 2011, by The McKellar Law Firm, PLLC

Bank fraud attorneys often deal with fact scenarios similar to the recent case of a former bank employee in Pennsylvania who was indicted on federal bank fraud and identity theft charges. According to PhillyBurbs.com, Jennell Digby worked for TD Bank in Philadelphia when she met Kashon Adade, one of her alleged co-conspirators. According to the indictment, Adade provided Digby with the Social Security Numbers of TD Bank customers. Digby would confirm that the Social Security Numbers were those of account holders then give Adade additional information about those account holders such as their names, account numbers, and account balances. Adade and others involved in the scheme allegedly used this information to withdraw over $70,000 from these account holders. If convicted, Digby could spend up to 41 years in prison and face a fine of $2 million.

1342748_bank.jpg

Digby is charged with bank fraud under 18 U.S.C. § 1344. This provision provides that a person who "knowingly executes, or attempts to execute, a scheme or artifice - (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations or promises." This provision provides a penalty of up to 30 years in prison, a $1 million fine, or both. Prosecutors allege Digby violated this statute because she, Adade, and their co-conspirators engaged in a scheme to defraud TD Bank by fraudulently using illegally obtained account information to withdraw bank funds.

In order for a defendant to be liable under § 1344, the government must also prove that the defendant made a material misrepresentation or concealed a material fact in committing the fraud. The materiality requirement is an element of fraud at common law. The Supreme Court has determined that it is also an element that the government must prove beyond a reasonable doubt under the bank fraud statute, even though the statute itself does not specifically require materiality. Typically, proving materiality requires showing one of two things. First, a matter is material if a reasonable person would consider the matter in determining how to act. Second, a matter is material if the person making the representation or omission knows that the other party considers it important in determining how to act, regardless of whether a reasonable person would consider the matter important or not. In other words, if the matter is sufficiently important that it could change the behavior of a reasonable party, then the matter is material.

In many cases, however, demonstrating that a material misrepresentation occurred is not very difficult. For example, in United States v. Miller, a federal appeals court upheld a bank fraud conviction under § 1344 where the defendant used his employer's ATM card to withdraw money from her account without her permission. The Court of Appeals held that each time the defendant put the card in an ATM, he was representing to the bank that he was authorized to withdraw funds. Additionally, the Ninth Circuit held that a borrower who misrepresents his or her ability to repay a loan from a bank or financial institution may be prosecuted under § 1344 because such statements could influence the lender. Thus, there are a number of activities that can give rise to liability under § 1344 provided that the government can show the defendant acted with an intent to defraud.

Bank Fraud Scheme Results in 30 Arrests in Knoxville Federal Court

November 24, 2010, by The McKellar Law Firm, PLLC

United States Prosecutors unleashed an Indictment last week against 30 defendants from Tennessee and Georgia for an alleged conspiracy to commit bank fraud, in violation of 18 U.S.C. Section 1344. The indictment alleges that the ringleaders of this alleged conspiracy recruited homeless people to cash fake payroll checks in area banks. According to an article by the Knoxville News Sentinel's Jamie Satterfield, Judge Bruce Guyton ordered the alleged ringleader of the conspiracy to be held without bond pending his trial.

check.jpg

Federal law on Bank Fraud is codified at 18 U.S.C. Section 1344 as follows:

Whoever knowingly executes, or attempts to execute, a scheme or artifice-- (1) to defraud a financial institution; or (2) to obtain any of the moneys, funds, credits, assets, securities, or other property owned by, or under the custody or control of, a financial institution, by means of false or fraudulent pretenses, representations, or promises; shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.

This case is another example of the Government continuing its efforts to prosecute white collar and economic crimes. If you are unfortunate enough to be accused of committing economic crimes, your best move is usually to contact an experienced criminal defense attorney immediately. Oftentimes, the Government has been investigating the alleged crimes long before a suspected defendant is even aware of the Government's involvement. Accordingly, time is of the essence to ensure that your rights are protected.

Additional Resources:
"Alleged Leader of Fraud Scheme Jailed," Knoxnews.com, November 24, 2010
112410ring.pdfUnited States v. Larry Seymore, et al., Indictment
18 U.S.C. Section 1344 - Bank Fraud