February 3, 2014
By Bob Coleman
Editor, Coleman Report
Southern California based electronic wholesales New Electronic and Tech Club sure looked good on paper. Profits were good, a strong AR and inventory borrowing base, supported by tax returns with both companies run by pillars of the community.
Sadly, it was all a sham. Seems all the documents submitted during a four year run were fiction.
Three banks wrote off $33 million – United Commercial Bank for $28 million, $5 million from Security Pacific Bank and $3 million from TomatoBank.
Says the FBI, “He allegedly made false statements to obtain loans or increase existing loans for his companies, including displaying inflated company assets, sales and accounts receivable information which he knew were significantly less than the amounts he represented on documents submitted to the financial institutions. Most of the purported inventory and accounts receivables of Mizrahi’s companies did not exist and some of the accounts payable were non-existent. The companies’ inventory was auctioned off, but only a small amount of the loans were recovered. “