Advertisement

Men charged with fraud

Banks gave millions to groups for allegedly fraudulent equipment leases with lucrative commissions for suspects.

December 20, 2007|By Barbara Diamond

Two Laguna Beach men, Adam Zuckerman, 37, and Jeff Greenough, 48, were among 23 defendants charged Nov. 7 with fraud in an FBI’s investigation into alleged multimillion-dollar leasing scams dubbed Operation Lease Fleece.

Neither man has entered a plea to date, according to Department of Justice spokesman Thom Mrozek.

Zuckerman, who owned and operated Brickbanc Capital in Costa Mesa, was charged with one count of mail fraud, Mrozek said.

“There is no indication when he will appear in court or even if he has an attorney,” Mrozek said.

Brickbanc had six to 10 employees and was also known by other names, Mrozek said.

Greenough was charged with one count of wire fraud. He worked for Peniche in Orange County. No court date has been scheduled for him.

Advertisement

Operation Lease Fleece targeted individuals in the equipment leasing industry, including loan brokers, equipment vendors and an employee of CitiCaptial, the leasing division of Citibank, which assisted the FBI in the investigation.

Citibank estimates its loss in the fraud at $9.5 million. Other victimized institutions include Wells Fargo Bank, American Enterprise Leasing, Key Bank, Bank of America and U.S. Bank. Total losses are estimated at least $20 million.

In a news release issued the day the charges were filed, the Justice Department stated some of the defendants marketed loans through companies such as Brickbanc to small businesses experiencing credit problems.

Once the businesses agreed to apply for loans, some of the defendants instead submitted equipment-lease applications to lenders. The applications, which allegedly were inflated so that the defendants could obtain lucrative “commissions” for themselves, were submitted along with false invoices that purported to document the sale of computer equipment to the small businesses.

The fraudulently documented equipment-lease applications were submitted because the qualifying criteria were less stringent than a cash loan, according to Mrozek.

After the lending institutions approved the financing, proceeds were used to make cash loans to the small businesses and to pay commissions to employees at companies such as Brickbanc, CapitalWerks in Santa Ana and others.

Hundreds of bogus equipment-lease packages with fake invoices were presented to financial institutions.

The FBI spent more than a year investigating the alleged fraudulent operations.

Charges filed against the 23 defendants included mail fraud, wire fraud and obstruction of justice.

The defendants will be summoned to make court appearance over the next several months.


Coastline Pilot Articles Coastline Pilot Articles
|
|
|