Fraud Friday – 14 Years Later, Former Bank Director Found Guilty of 5 Counts of Bank Fraud

July 21, 2023

Delaney Sexton
Contributing Editor

Fraud Friday – 14 Years Later, Former Bank Director Found Guilty of 5 Counts of Bank Fraud

“Mendel Zilberberg, while working as a practicing lawyer and serving as a director of Park Avenue Bank, ignored his duties and took advantage of the bank, viewing it as the object of his fraud scheme.  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.  The bank collapsed just months after Zilberberg defrauded it,” says U.S. Attorney Damian Williams.

In 2009, Mendel Zilberberg worked as a Director of Park Avenue Bank where he conspired to obtain a $1.4 million loan with his co-conspirators. He, Aron Fried, and another knew they could not obtain a loan directly. The indictment states that the other co-conspirator had a criminal record and was not creditworthy. With this in mind, they recruited a straw borrower to make the loan application based on a false premise and containing false representations.

To aid the scheme, Zilberberg used his position at the bank to “personally shepherd the fraudulent loan through the Bank’s approval process and guard it from scrutiny.” Once the bank issued the loan, the proceeds were quickly disbursed among the conspirators. Mendel Zilberberg was given more than $500,000 for his help, and Fried received $434,000. The remaining proceeds were left to the other co-conspirator whom the loan was originally for.

In 2010, Park Avenue Bank was closed due to “ineffective management and inadequate capital.” The indictment states that by October 2010, the loan fell into default and caused a loss of $1,066,853.

Aron Fried pled guilty to conspiracy to commit bank fraud on November 15, 2022. He was sentenced to one year and one day in prison. Zilberberg’s trial which lasted a week concluded with him being found guilty of five charges:

• Conspiracy to commit bank fraud
• Bank fraud
• Conspiracy to make false statements to a bank
• Making false statements to a bank
• Misapplication of bank funds

Facing a maximum sentence of 125 years, Mendel Zilberberg will be sentenced at the end of November 2023.

Source:
U.S. Attorney’s Office Press Release
Indictment

Read our previous reporting:
Fraud Friday – Park Avenue Bank Director Charged With $1.4 Million Bank Fraud – 11/22/19