CBS News reports two U.S. citizens from Los Angeles are on the run after the FBI charged the pair with federal bank fraud. If captured and convicted, Aviv Mizrahi, age 53, and Aryeh Greenes, age 58, face life behind bars. The pair are charged with 34 counts of bank fraud and making false statements to a federally insured bank.
While bank fraud is a relatively common crime, the prosecutors and regulators suggest that the fraud committed by the men may have caused the collapse of two banks, United Commercial Bank and Security Pacific Bank. Those failures in turn cost the FDIC over $1 billion in losses.
The indictment claims the men used phony financials in order to generate $33 million in loans. Ultimately, the pair defaulted leaving three banks out a total of $33 million. Apparently two of those banks then failed causing hundreds of millions of dollars of additional losses.
Like all criminal defendants, the men are presumed innocent until proven guilty. If convicted, Greenes faces 330 years in prison while Mizrahi faces 1020 years. Federal criminal sentences, however, are generally based on published sentencing guidelines. Whether the men could be held responsible for the collapse of the banks probably has little relevance on sentencing. With just $33 million in losses the men could easily find themselves spending life behind bars.
We often wonder if fraudsters like these men had help inside the banks. Anytime a bank violates policy or banking rules and suffers harm, there is a potential for recovery under the Financial Institutions Reform Recovery and Enforcement Act. That law, commonly known as FIRREA, pays whistleblowers up to $1.6 million for their original source information.
If you have inside knowledge of bank fraud, give us a call. We help whistleblowers under the FIRREA and federal False Claims Act collect the maximum awards possible.