David Saks: Former Banker Sentenced for Fraud Scheme

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Former Banker Sentenced for Fraud Scheme

Former Banker Sentenced for Fraud Scheme

U.S. Attorney’s Office March 11, 2014
  • Eastern District of Pennsylvania (215) 861-8200

Daniel Mumbower, 35, a former banker, of Glassboro, New Jersey, was sentenced today to 41 months in prison for two counts of bank fraud and one count of receiving bribes by a bank employee for his role in a scheme that defrauded lenders of nearly $3 million. U.S. District Court Judge C. Darnell Jones, II, also ordered three years of supervised release, a $300 special assessment, restitution of $2,718,758, and forfeiture of $2,516,317. Mumbower must surrender to the Bureau of Prisons on May 14, 2014.

Mumbower worked as a financial specialist at Wachovia Bank in Sicklerville, New Jersey, from April 2005 through April 2008. In mid-2006, Mumbower met a corrupt loan broker, Gerald Cathie (charged elsewhere), who began bringing clients’ applications for lines of credit to Mumbower for submission to Wachovia. Through Cathie, Mumbower met Simon Aouad (charged elsewhere). Aouad also brought others’ loan applications to Mumbower. Mumbower realized that the applications Cathie and Aouad brought him contained false income and employment information and were supported by false documentation, such as false tax returns, but he processed the applications anyway. Mumbower earned a commission from Wachovia Bank for each loan that closed. Mumbower paid Cathie and Aouad a commission out of the proceeds of the loan, which was against bank policy, and Cathie paid Mumbower a cash kickback of approximately $200 per approved loan. Aouad, also, paid Mumbower kickbacks totaling approximately $10,000.

The defendant processed a regular, weekly stream of fraudulent loan applications brought to him by Cathie and Aouad. Most applications were for lines of credit totaling between $50,000 and $100,000.

Mumbower received several thousand dollars in kickbacks from both Cathie and Aouad for assisting them in obtaining lines of credit for others. Most of the loans were unsecured business lines of credit. The borrowers defaulted. The total intended loss for the fraudulent lines of credit was approximately $765,000. During the same time frame, Mumbower met John Lucidi, charged elsewhere, a corrupt mortgage broker working in West Chester and Newtown Square. Lucidi was orchestrating a mortgage fraud scheme in which he and others, including Aouad, found buyers to apply for mortgages to purchase real estate located mostly in North Wildwood, New Jersey. With the knowledge of Lucidi, Aouad, and others, but unbeknownst to the lenders, the buyers applied for the mortgages using false and fraudulent income and asset information and received tens of thousands of dollars in undisclosed kickback payments for purchasing the properties. At the request of Aouad and Lucidi, Mumbower provided false verifications of deposit (VODs) purporting to show that the mortgage applicants had tens of thousands of dollars in Wachovia Bank accounts. These false VODs were provided to the mortgage lenders, including Wells Fargo Bank, PNC Bank, and others, in support of mortgage applications to purchase real estate located in West Chester, Pennsylvania; North Wildwood, New Jersey; and Boston, Massachusetts. In exchange for providing the false VODs, Aouad paid Mumbower $5,000 cash. Many of the properties purchased using the false verifications of deposits supplied by Mumbower went into default, and the lenders lost approximately $2 million.

The defendant faces a maximum possible sentence of 90 years of imprisonment, five years of supervised release, a $3 million fine, and a $300 special assessment.

The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigations, and the United States Secret Service. It is being prosecuted by Assistant United States Attorney Nancy E. Potts.

source: FBI

http://www.fbi.gov/philadelphia/press-releases/2014/former-banker-sentenced-for-fraud-scheme?utm_campaign=email-Immediate&utm_medium=email&utm_source=fbi-in-the-news&utm_content=305367

 




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Comment balloon 0 commentsDavid Saks • March 12 2014 12:01PM

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