Duped Eight Banks Out Of Big Bucks
A Fresh Meadows man is spending the next eight years in a federal prison for participating in a scheme to fraudulently obtain commercial bank loans, it was announced.
Christopher Cavounis-who pled guilty on Dec. 22, 2011 to one count of conspiracy to commit bank fraud, five counts of bank fraud and one count of bank bribery-was sentenced to 97 months behind bars last Thursday, June 14, by U.S. Southern District of New York Judge Robert P. Patterson.
In addition to his prison term, Cavounis was sentenced to two years of supervised release, and ordered to pay $8.2 million in forfeiture and more than $7.9 million in restitution.
“Cavounis and his co-conspirators went to great lengths to mislead banks into issuing millions of dollars of credit,” said U.S. Attorney for the Southern District of New York Preet Bharara. “He will now pay for his crimes, and we will continue to work to ensure that this type of fraud- which ultimately hurts the average consumer looking for a loan-does not go unpunished.”
According to the superseding indictment, the criminal complaint and statements made during court proceedings, Cavounis, Jagdesh Cooma, Thomas Nuccio and others fraudulently obtained between 2009 and November 2010 at least 16 commercial bank loans and lines of credit, receiving at least $10 million, from eight different lenders: Capital One Bank, N.A.; Citibank, N.A.; First Republic Bank; Herald National Bank; New York Commercial Bank; Signature Bank; Sovereign Bank; and TD Bank, N.A.
All of these loans are in default.
To induce the lenders into providing the loans, Cavounis, Cooma and Nuccio prepared, and then submitted, applications and supporting documentation for commercial loans that contained false and misleading information on behalf of empty shell companies with no existing businesses or assets.
As part of the scheme, Cavounis and Cooma also recruited straw borrowers who provided personal identifying information to the defendants in exchange for future payment. In applications for loans from the lenders, the defendants represented these individuals to be the owners or executives of various companies.
In addition, Cavounis and Cooma created fraudulent documents, which purported to accurately reflect the personal and financial information of each straw owner and corresponding company, and submitted them to the lenders in support of the loan applications.
Unbeknownst to the lenders, not only were the straw borrowers totally unaffiliated with the companies, but the companies themselves were neither existing businesses nor had actual earnings or income. In connection with certain applications, Cavounis also assumed the identity of Nuccio and provided financial institutions with a fraudulent driver’s license in his name.
In an effort to obtain the loans, Cavounis paid a Citibank employee more than $135,000 in bribes over the course of four months in 2010 to secure approval for several lines of credit. In total, Cavounis personally obtained approximately $2.45 million in loans that were issued to empty shell companies he controlled.
Nuccio, 31, of Pomfret, Conn. was sentenced by Judge Patterson on May 14 to one year and one day in prison, followed by three years of supervised release, and ordered to pay $500,000 in forfeiture. Cooma was sentenced to up to 30 years in prison last Friday, June 15.
Bharara praised the work of the Federal Bureau of Investigation and the Internal Revenue Service.
This case was prosecuted by Assistant U.S. Attorneys Zachary Feingold and Christopher D. Frey of the Complex Fraud Unit of the Southern District of New York U.S. Attorney’s office.
