John M Claydon, Jr., 57, formerly of Trumbull, Connecticut, was sentenced to 60 months of imprisonment, followed by three years of supervised release. On December 22, 2006, Claydon pleaded guilty to one count of bank fraud arising from his scheme to defraud a federally insured bank in connection with residential real estate loans.

According to documents filed with the Court and statements made in court, Claydon was a practicing attorney in Fairfield, Connecticut, who performed real estate closings. In pleading guilty, Claydon admitted that he was engaged by People’s Bank to act as a closing attorney in connection with the refinancing of mortgage loans on two properties owned by friends of his. At the time, Claydon was experiencing substantial financial problems relating to his law practice. In October 2004, when Claydon received checks from the bank as part of the refinancing transactions, he converted the money – more than $1.2 million – to his own use. Only after being confronted with his failure to use the proceeds as directed and repay the underlying loans did Claydon eventually pay the bank approximately $469,050. He has not repaid the balance.

Claydon was ordered to pay restitution to his victims, which includes $3750 to the property owners, $9812.51 to People’s Bank, and approximately $720,000 to the title insurance company that paid the majority of People’s Bank’s losses.

Claydon will have a restitution obligation of approximately $2.8 million to his victims of separate crimes that are being prosecuted by the State of Connecticut. Claydon is scheduled to be sentenced for those crimes in state court later this month, where he has agreed to a sentence of 20 years of imprisonment, suspended after he serves 15 years.