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Rockland resident Mendel Zilberberg, 61, of Monsey, was charged this week with Aron Fried, 46, a Toms River, New Jersey, resident with bank fraud and other charges after allegedly scheming to obtain a $1.4 million loan from the bank.
United States Attorney Geoffrey Berman said Zilberberg and Fried used false statements and misrepresentations to receive the loan, resulting in a $1 million loss for the bank when the loan later defaulted.
Zilberberg is also facing charged separately for embezzling and misappropriating bank funds while he was a director and insider there.
It is alleged that Fried, and an unnamed co-conspirator, partnered with Zilberberg, who had the authority to shepherd the fraudulent loan through his access as a bank director. He also was able to protect the scheme once the loan was approved.
Berman said that based on the false representations made to the bank and Zilberberg’s interference, the bank issued the $1.4 million loan to a straw borrower, who then spread the money to bank accounts controlled by the three.
In total, Zilberberg allegedly received approximately $466,000; Friend received at least $434,000 and the third co-conspirator received the rest.
Zilberberg and Fried were each charged with one count each of conspiracy to commit bank fraud, bank fraud and making false statements to a bank, each carries a maximum sentence of 30 years in prison if convicted.
“As alleged, Mendel Zilberberg and Aron Fried conspired with another to defraud the bank where Zilberberg served as a director,” Berman said. “In a textbook case of self-dealing and breach of fiduciary duty, Zilberberg allegedly exploited his position at the bank to grease the skids for a loan given under blatantly false pretenses, a huge chunk of the proceeds of which he himself dipped into.”
Zilberberg was also charged with one count of embezzlement and misappropriation of bank funds, which also carries a maximum term of 30 years in prison. Both men were expected to make a court appearance on Wednesday, Nov. 13.
FBI Assistant Director-in-Charge William F. Sweeney Jr said, “as alleged, when Fried and his co-conspirator realized they wouldn’t be able to secure a loan the traditional way – by legitimately obtaining the money from an authorized financial institution – they brought a straw borrower and bank director into their circle to effectively carry out the fraudulent activity.
“As alleged, Mendel Zilberberg, the bank’s director, played a key role in carrying out this scheme, driving the loan through the approval process while shrouding the details in secrecy. When the bank realized a loss of more than $1 million, the defendants allegedly walked away with the money from the defaulted loan.”
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