Guilty Of Duping Bank To Get Credit Lines
Federal jurors convicted a former executive at a Long Island City-based holding corporation on Monday, May 20, of carrying out a scheme to defraud a bank out of millions of dollars in loans, it was announced.
Rodney Watts, 39, of Brooklyn was found guilty of bank fraud, false statements and conspiracy to commit bank fraud on Monday following a three-week trial at the U.S. District Court in Brooklyn. He faces a maximum of 30 years behind bars when he is sentenced at a date to be announced.
Watts previously served as the chief investment officer for GDC Acquisitions LLC, a firm which owns a number of smaller construction and home improvement outfits and maintains an office at 47-07 32nd Pl. in Long Island City.
“Using books and records that were no more than fairy tales, the defendant fleeced Amalgamated Bank of $21 million,” said U.S. Attorney for the Eastern District of New York Loretta E. Lynch in a statement on Monday. “The jury saw through his creative writing and web of lies and he will now be held to account for his crimes.”
GDC Acquisitions’ former chief executive officer-Courtney Dupree, 41-was convicted in December 2011 for his role in the scheme and is currently awaiting sentencing, federal law enforcement sources stated.
According to the charges and testimony brought at trial, Watts, Dupree and others at GDC Acquisitions falsified documents on their financial history and presented them to Amalgamated Bank in seeking lines of credit totaling $21 million. Reportedly, the company’s revenues were inflated and a book was kept cataloguing lucrative business deals which never took place.
Company executives charged in the scheme claimed on the phony documents submitted to the bank that GDC Acquisitions had $25.2 million in accounts receivable. According to the government’s investigation and testimony at trial, the actual figure was just $9 million.
Federal agents noted that Watts, Dupree and others involved in the scheme also violated the terms of their loan agreement with Amalgamated Bank by secretly purchasing a company and failing to report the transaction to their lender.
Law enforcement sources also noted the company attempted to use the same fraudulent financial records in an attempt to secure additional funding from another financial institution, C3 Capital, which is based in Kansas City, Mo.
Federal agents were made aware of the scheme when one of the participants turned himself into the FBI and, in cooperation with authorities, acted as an undercover witness during the government’s two-month investigation into the scheme. Lynch noted that GDC Acquisitions’ former chief financial officer and two accountants working for the firm testified on the government’s behalf.
Lynch thanked the FBI and the U.S. Postal Inspection Service for leading the investigation in conjunction with the Financial Fraud Enforcement Task Force, an interagency coalition which investigates and prosecutes cases of criminal financial misconduct.
Assistant U.S. Attorneys Michael L. Yaeger, Catherine M. Mirabile, David C. Woll and Brian Morris prosecuted the case.
