Scheme Forced Bank to Close, FDIC Paid $4.3 Million in Losses

KANSAS CITY, MO—Beth Phillips, United States Attorney for the Western District of Missouri, announced that the former president of Hume Bank in Bates County, Mo., pleaded guilty in federal court today to making false statements to the FDIC as part of a bank fraud scheme that caused such significant losses that the bank was pushed into insolvency.
Jeffrey W. Thompson, 40, of Hume, Mo., pleaded guilty before U.S. Magistrate Judge Sarah W. Hays to the charges contained in a Dec. 1, 2009, federal indictment.
Thompson became president of Hume Bank in 2001. From Jan. 1, 2004, through Aug. 31, 2007, when he left the bank, Thompson concealed problem loans from state and federal bank examiners. Due primarily to loan losses on loans originated and administered by Thompson, in which he masked past due loans by altering loan maintenance records, the bank became insolvent and was closed by the Missouri Division of Finance on March 7, 2008. In order to meet obligations to depositors, the FDIC insurance fund sustained a loss of $4,324,463.
Thompson admitted that he masked past due loans by altering loan maintenance records. For example, past due principal was reduced to zero in 1,584 instances, past due interest was reduced to zero on 1,460 occasions, and 1,445 maturity dates were changed on the loan maintenance reports. The great majority of these changes were not supported by loan modification agreements in bank files. Thompson personally made the majority of the changes. The false loan maintenance reports concealed problem loans from state and federal bank examiners and from the bank’s board of directors.
Thompson also completed false Officer’s Questionnaires, by falsely stating that the bank had no accommodation loans, or nominee loans, and by falsely stating that the bank had no instances of capitalized interest. In truth, Thompson had made accommodation, or nominee loans, to relatives from which he personally profited, and had made loans which capitalized interest.
By pleading guilty today, Thompson agreed to forfeit to the government $300,000, which represents proceeds from the fraud scheme, or his residential property.
Under federal statutes, Thompson is subject to a sentence of up to 30 years in federal prison without parole, plus a fine up to $1 million and an order of restitution. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.
This case is being prosecuted by Assistant U.S. Attorney Kate Mahoney. It was investigated by the Federal Deposit Insurance Corporation and the Federal Bureau of Investigation.

A 46-year-old Golden Valley man pled guilty earlier today in federal court in Minneapolis to orchestrating a mortgage fraud scheme that resulted in the theft of more than $2.5 million from lenders nationally. The scheme centered on obtaining fraudulent loans for the purchase of 24 homes in the Twin Cities. Appearing before United States District Court Judge Joan N. Ericksen, Zack Zafer Dyab pled guilty to one count of conspiracy to commit wire fraud and one count of money laundering in connection to the crime. Dyab was indicted along with Julia Alexander Rozhansky, age 46, of Minnetonka, on December 8, 2009.
In his plea agreement, Dyab admitted that from 2003 through early 2007, he conspired with Rozhansky and others to induce through fraudulent means numerous mortgage lenders throughout the U.S. to loan substantial sums of money to unindicted co-conspirators, who happened to be relatives of Rozhansky. Dyab also admitted stealing large amounts of loan proceeds for his personal use.
At the time, Dyab owned American Choice Lending, Inc., a mortgage brokerage company. Rozhansky was his assistant and had supervisory authority over the company’s loan officers and loan processors.
To further the fraud scheme, Dyab often arranged for straw buyers to purchase properties at inflated prices from him or companies he owned. In other instances, he had straw buyers purchase properties at inflated prices from third-party sellers. After those sales, Dyab and Rozhansky purportedly caused the sellers to pay them a portion of the sale proceeds. In addition, Dyab sometimes had a real estate broker receive so-called real estate commissions from the transactions, which the broker then would sign over to Dyab.
In each transaction, Dyab admitted submitting a mortgage loan application that greatly exaggerated the monthly income and bank account balance of the straw buyer. On occasion, he also deposited funds into the bank account of a straw buyer in an effort to trick the lender into believing that the buyer had substantial liquidity. In addition, Dyab routinely provided straw buyers with money to bring to transaction closings, to be passed off as “down payments.” Moreover, he led lenders to believe that the straw buyers intended to live in the homes they were purchasing, when, in fact, he knew they actually planned to sell the homes to third-party straw buyers within a year. The third-party straw buyers then would default on the mortgage loans.
On February 15, 2005, at the conclusion of one of these real estate transactions, Dyab obtained $63,938.94 in seller proceeds by forging the seller’s name on the back of the proceed check. He then deposited the check into his own bank account. Then, on February 17, 2005, Dyab used $15,000 of those funds to purchase a cashier’s check.
For his crimes, Dyab faces a potential maximum penalty of five years in prison on the conspiracy charge and ten years on the money laundering charge. Judge Ericksen will determine his sentence at a future hearing, yet to be scheduled. Rozhansky also pled guilty before Judge Ericksen today. She, too, will be sentenced at a future hearing.
This case is the result of an investigation by the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division. It is being prosecuted by Assistant U.S. Attorney David J. MacLaughlin.