October 15, 2021
Fraud Friday – Two Bank Managers Sentenced to Six and Thirty Months for Loan Fraud
“Bank employee Herode Chancy used fake businesses, doctored bank statements, and stolen identities in an effort to obtain over $1 million in commercial loans. Now Chancy has rightly been sentenced to prison for his crime. Prosecutions like this one should serve as notice to individuals in positions of trust at financial institutions that engaging in corrupt criminal conduct will lead to prosecution and prison,” says U.S. Attorney Audrey Strauss.
Herode Chancy, a former bank manager at the Manhattan branch of an undisclosed national bank, along with co-conspirator Adedayo Ilori schemed from March 2019 to March 2020 to fraudulently obtain business loans from a third-party commercial lender. Together they submitted eight fraudulent loan applications worth $1,025,000 in total. The two would doctor bank statements and list the identities of other people, including some identities that were stolen. To receive the loan payments after approval, they would open bank accounts under the names of the identities used on the loan applications.
Another bank manager at the bank Chancy worked for, Michael Albarella, accepted a $10,000 bribe from Chancy and Ilori to open a bank account using one of the stolen identities. This bank account was going to be used to launder $200,000 of the expected loan proceeds.
Ilori and Chancy believed that the loan underwriter from the third-party commercial lender was also participating in this scheme. They agreed to pay a commission for the underwriter’s role in the conspiracy, but the underwriter was actually an undercover law enforcement officer.
Chancy pled guilty to one count of conspiracy to commit wire and mail fraud and admitted to conspiring to commit money laundering. In early September, he was sentenced to thirty months in prison, two years of supervised release, and to forfeit $10,000 in the fraudulent loan proceeds.
Adedayo Ilori was charged with conspiracy to commit mail and wire fraud, wire fraud, mail fraud, conspiracy to commit money laundering, and aggravated identity theft. His sentencing was set for October 13, 2021, but the U.S. Department of Justice has not posted a press release regarding the sentencing.
Albarella pled guilty to one count of bank bribery. At the beginning of August 2021, he was sentenced to six months in prison and three years of supervised release.