Former Lawyer And Bank Director Mendel Zilberberg Faces 125 Years In Prison For $1.5 Million Straw Deal Scam
A former lawyer who ran a Manhattan bank faces 125 years in federal prison. A federal jury convicted Mendel Zilberberg for engaging a straw buyer for a $1.5 million fraudulent loan scam.
The scam led to the collapse of Park Avenue Bank.
The jurors convicted Zilberberg, Aron Fried and another conspirator for a $1.4 million loan from 2009.
The straw buyer defaulted on the loan. As a result the default, the bank collapsed
Prosecutors were able to prove Zilberberg had used his position of bank director to push the loan through underwriting. The former lawyer knew the loan application was filed with false statements and misrepresentations. The money supposedly was going to finance a home healthcare business.
Jury Convicts Former Attorney Mendel Zilberberg Of Five Counts Of Fraud
The federal jury found Zilberberg guilty of five counts after a one-week trial. The jury found him guilty of conspiracy to commit bank fraud and bank fraud.
They also found him guilty of conspiracy to make false statements to a bank and making false statements to a bank. Additionally and most damning, they found him guilty of misapplication of bank funds.
Together, the trio concocted a false premise for the loan. They then supported the loan application with false representations. They the created pass-through accounts to funnel the proceeds of the fraudulent loan to themselves.
Zilberberg used his position to facilitate the loan. The fraud caused the bank to collapse when the loan defaulted.
Prosecutors Say The Former Lawyer And His Cohorts Squeezed The Bank
Zilberberg received more than $500,000 of the loan proceeds, while Fried received about $434,000 and another conspirator split the rest, Williams said. The straw borrower received nothing from the loan, which defaulted, resulting in a loss of over $1 million for the bank.
“Far from helping the bank through a tenuous moment in its existence, Zilberberg was focused on squeezing money out of it for himself, on the basis of lies,” Williams said. “The bank collapsed just months after Zilberberg defrauded it.”
Fried, a Toms River, New Jersey, resident, pleaded guilty to conspiracy to commit bank fraud in November 2022. U.S. District Court Judge George Daniels sentenced Fried on April 10 to one year and one day in prison.
Daniels is scheduled to sentence Zilberberg on Nov. 29. While Zilberberg faces a statutory maximum of 125 years in prison, the judge determines the sentence.
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