Police Officer and Bank Employee Indicted for Loan Fraud

Allison Tussey —  July 18, 2011 — Leave a comment

 

 

Victor Patela, 35, a police officer, and Jose Dominguez, a/k/a “Jose A. Dominguez“ a/k/a “Joe Dominguez,” 44, a bank loan officer, both of Newark, New Jersey, each were indicted by a federal grand jury on allegations that they defrauded an Elmwood Park, N.J., bank in order to secure a $1.9 million commercial real estate loan.

The defendants are charged each with one count of conspiracy to commit bank fraud and one count of bank fraud. Patela is additionally charged with two counts of loan application fraud and one count of making a bank bribery payment; Dominguez is additionally charged with one count of receiving a bank bribery payment.

The defendants were previously charged by Complaint on February 24, 2011, with one count each of conspiracy to commit bank fraud. They will be arraigned on the Indictment in Newark federal court on a date to be determined.

According to the Indictment and other documents filed in Newark federal court:

The defendants conspired to defraud Spencer Savings Bank, located Elmwood Park, N.J., by providing false statements and documents in order to secure a $1,920,000 commercial loan for JVI Realty, LLC, (“JVI“) a New Jersey limited liability company solely owned by Patela. Patela made bribery payments to Dominguez, who was an employee at the bank and served as the loan officer on JVI Realty‘s commercial loan.

On August 30, 2004, Patela paid $10,000 to Dominguez by issuing a personal check to Dominguez‘s wife at the time, who deposited the money into a checking account in her name to which Dominguez had access.

Approximately two weeks later, through JVI, Patela applied for a commercial real estate loan from the bank to purchase apartment buildings located in Elizabeth, N.J. On the same day, Patela signed a Personal Financial Statement (“PFS”) falsely reporting that he had a net worth of over $3.8 million, which included $430,000 cash in bank accounts and ownership of real estate valued at $3.5 million. Patela signed the PFS underneath the Representations and Warranties section, agreeing the information was correct, although he knew he did not have the money.

The Mortgage & Security Agreement JVI entered into with Spencer Savings prohibited Patela from encumbering or mortgaging the Elizabeth apartment buildings without the bank’s written consent. However, JVI, through Patela and Dominguez, subsequently secured a second mortgage on the Elizabeth apartment buildings””both defendants signing the second mortgage and mortgage note as corporate officers of JVI on November 8, 2004. The $300,000 loan was used as part of the $480,000 equity contribution to purchase the Elizabeth apartment buildings. Dominguez never disclosed his relationship with JVI and Patela to Spencer Savings Bank while serving as the loan officer for any of the related transactions.

The same day, Patela, through JVI, paid Dominguez $20,000 by issuing a check drawn on a JVI checking account at the bank, payable to cash. The $20,000 check was endorsed by Dominguez‘s wife at the time and deposited into an account to which he had access. From November 24, 2004, to May 23, 2005, Patela continued to make payments to Dominguez by issuing several checks drawn on the same JVI checking account at the bank, made payable to cash, that totaled over $10,000. The checks were signed by Dominguez‘s wife.

Patela made his last payment on the $1,920,000 mortgage with Spencer Savings Bank in November 2008, before causing the bank to default on the loan. In February 2010, Patela turned over the deed to the Elizabeth apartment buildings to the bank in lieu of foreclosure. After Spencer Savings Bank sold the Elizabeth buildings, the bank’s loss amount totaled over $400,000.

Each of the six counts carries a maximum potential penalty of 30 years in prison and a $1 million fine. The Indictment also seeks forfeiture of $43, 863.54, representing the bribery payments Patela paid to Dominguez in connection with the loan.

U.S. Attorney Paul J. Fishman announced the indictment.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent In Charge Michael B. Ward in Newark, with the investigation leading to the Indictment.

The government is represented by Assistant U.S. Attorney Zahid N. Quraishi, of the U.S. Attorney’s Office Special Prosecutions Division in Newark.

The charges and allegations made in the Indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

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Allison Tussey

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