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Fraud Friday – Bank Founder and Chairman Indicted in Loan Fraud

November 9, 2018

By Dominic J Bartolone
Contributing Editor, Fraud Friday

Fraud Friday – Bank Founder and Chairman Indicted in Loan Fraud

On Halloween, a New Jersey developer was indicted in federal court after a six-year investigation into loan fraud that allegedly bilked millions from a bank the accused founded.

Fred Daibes, 61 was charged five counts of misapplication of funds, six counts of making false entries to deceive a financial institution and one count of causing reliance on a false document to influence the FDIC

A prominent real estate developer in Bergen County, Daibes served as chairman of the board for Mariner’s Bank until April 2011.

The Feds say he and others concocted a scheme to recruit straw borrowers to apply for and obtain loans from Mariner’s Bank between January 2008 and December 2013.

Prosecutors say that Daibes and his co-conspirators recruited nominees to apply for loans on behalf of Daibes. Utilizing this plan, Daibes was able to circumvent loan limits and obtain millions of dollars in loans that he would not have qualified for otherwise.

Say the Feds, “In order to convince Mariner’s Bank to approve two of the Nominee Loans, McManus signed and provided to Mariner’s Bank a false certification attesting to the profitability of gas stations that two of the nominees had pledged as collateral after purchasing the gas stations from Daibes in sham transactions. After the FDIC began an investigation into one of the Nominee Loans, Daibes and others created and submitted to the FDIC a backdated sales contract to make it falsely appear as though one of the nominees had obtained one of the nominee loans from Mariner’s Bank in order to pay Daibes for his interest in a real estate venture.”
Daibes was also the chief executive officer of Daibes Enterprises, a consortium of companies specializing in real estate management and development, construction, and financing. His chief financial officer, Michael McManus, is also named in the indictment and charged with the same crimes.

Daibes attorney, Lawrence Lustberg, called the indictment “completely unjustified, both legally and factually.” He went on to claim that “there is no victim, no deception, and no fraud” and that he believed that in the end, Daibes would be cleared of all charges.

He noted that since Daibes owned the bank, the charges amounted to Daibes defrauding himself. He also claimed that “every penny of every loan has been paid back.

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