$1.4M Fraudulent Bank Loan Scheme: Monsey Man Sentenced

A Hudson Valley man has been sentenced to prison in connection with a scheme to obtain a fraudulent $1.4 million loan from Park Avenue Bank.

Monsey man sentenced to 30 months in prison for bank fraud. 

Monsey man sentenced to 30 months in prison for bank fraud. 

Photo Credit: Canva/John Guccione

Rockland County resident Mendel Zilberberg, age 65, of Monsey, was sentenced on Wednesday, March 19 following a one-week trial.

According to court documents, Zilberberg, who was a member of the bank's board of directors at the time of the offense, conspired with others, including Aron Fried, to obtain a fraudulent loan using a "star borrower" to make the loan application. 

The straw borrower applied for a $1.4 million loan from the Bank based on numerous lies, directed by Zilberberg and his co-conspirators, court documents show.

Records show Zilberberg used his privileged position at the Bank to ensure the loan was processed promptly. 

Based on the false representations made to the bank and Zilberberg's involvement in the loan approval process, the bank issued a $1.4 million loan to the straw borrower, which was quickly disbursed to Zilberberg and his co-conspirators through multiple bank accounts and transfers. 

Zilberberg received more than $500,000 of the loan proceeds. The straw borrower received nothing from the loan and ultimately defaulted, resulting in a loss to the bank of over $1 million.

In addition to the prison term, Zilberberg was sentenced to three years of supervised release and ordered to pay $1,066,853 in restitution and $506,000 in forfeiture.

“Those entrusted with the stewardship of financial institutions must uphold their responsibilities with integrity, not exploit their positions," US Attorney Damian Williams said. "Mendel Zilberberg’s manipulation of his roles as a legal practitioner and a director of Park Avenue Bank exemplifies a disturbing breach that led to a staggering loss for the institution." 

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