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John Arthur Hanratty, a 49-year-old New York-licensed attorney who lived in Rye until 2019 before moving to San Juan, Puerto Rico, was arrested on fraud charges in connection with a scheme to steal money from a bank for his investment firm, the US Attorney's Office for the Southern District of New York said.
According to federal officials, Hanratty was the founder and managing director of Rye-based Ebury Street Capital, LLC, an investment firm with a portfolio that mainly consisted of municipal tax liens.
Between 2017 and 2021, Hanratty, licensed to practice law in New York since 2002, allegedly participated in a scheme to steal money from an FDIC-insured bank by obtaining $20 million in commercial lines of credit extended to his firm. To do this, he made false statements on spreadsheets submitted to the bank, officials said.
After receiving the funds, Hanratty would then use them to pay off his firm's investors who had been threatening to sue and eventually did end up suing Ebury Street Capital. This was despite the fact that the firm was contractually required to use the money to purchase municipal tax liens or for ordinary business expenses, according to federal officials.
Ebury Street Capital’s commercial line of credit has since been completely exhausted and the firm now owes more than $20 million in principal and interest to the bank that it stole from, officials said.
Following his arrest, Hanratty was charged with one count of wire fraud affecting a financial institution and one count of bank fraud, which each carry a maximum prison sentence of 30 years.
FBI Assistant Director in Charge James Smith commented on the case, saying, "Fraudsters are very good at what they do. They are extremely convincing and will jump at every opportunity to defraud a new pool of potential victims. John Hanratty allegedly prioritized his own greed over decency and respect for the laws of our country."
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