Flipping Frenzy.com is your source for news, information, and commentary on Real Estate and Mortgage Fraud. 
If you believe you have been a victim of real estate or mortgage fraud, start here! Select your state from the pulldown menu below:
Former Manager of Connecticut ATM Company Admits Role in Multi-Million-Dollar Bank Fraud Conspiracy
The United States Attorney for the District of Connecticut announced that JOHN DeMILO, 42, of Branford, pleaded guilty today before United States District Judge Janet Bond Arterton in New Haven to one count of conspiracy to commit bank fraud stemming from his involvement in a multi-million-dollar bank fraud scheme.
According to court documents and statements made in court, DeMILO was the General Manager of Branford-based New England Cash Dispensing Systems, Inc. (“NECDS”), which was in the business of operating a network of automated teller machines (“ATMs”). Beginning in approximately March 2000, NECDS entered into an agreement with Domestic Bank of Cranston, Rhode Island, whereby NECDS would supply ATM services in conjunction with Domestic Bank, the victim in this case. The ATMs in the network were stand-alone machines located in various commercial establishments, such as convenience stores and gas stations, throughout several northeastern states, including Connecticut. While all of the ATMs in the NECDS network bore the logo of Domestic Bank, NECDS was responsible for contracting with merchants and placing the ATMs in their establishments, and would perform maintenance on the ATMs. Ultimately, there were three funding sources for ATMs within the NECDS network: Domestic Bank provided the cash for specified ATMs in the network, NECDS supplied cash for other ATMs in the network, and certain merchants supplied cash for other ATMs. Over the course of time, the number of ATMs in the network that were funded by Domestic Bank increased, while the number of ATMs funded by NECDS decreased.
In pleading guilty, DeMILO admitted that, from no later than 2007 to February 2010, he and others engaged in a conspiracy to defraud Domestic Bank of cash the bank supplied for use in the ATM network. As part of the scheme, DeMILO and others ordered cash from Domestic Bank by falsely representing that it would be used in a Domestic Bank-funded ATM, but then converted the cash for NECDS’s own purposes. When the cash was received by NECDS, DeMILO and his co-conspirators caused the sealed cash courier bags to be torn open, specific amounts of cash to be removed from those bags, typically in increments of $10,000, $6,000, or $4,000 per bag, and the cash to be used to refill ATMs that otherwise would have been loaded with NECDS’s own funds. DeMILO and his co-conspirators also engaged in a complex effort to hide the fact that funds had been diverted by “floating” funds supplied by the bank between ATMs and providing the bank with false accounting for its funds.
Domestic Bank ultimately lost approximately $4.8 million in funds that it had supplied to NECDS.
Judge Arterton has scheduled sentencing for January 28, 2011, at which time DeMILO faces a maximum term of imprisonment of 30 years.
On October 14, Joseph Sarlo, the former chief executive officer of NECDS, pleaded guilty to one count of conspiracy to commit bank fraud stemming from this scheme. He awaits sentencing.
This matter is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Paul Murphy.
A Ralph Roberts Site, Copyright 2005-2008 |