Former Chase Bank Official Convicted of Taking Bribes and Disclosing Existence of a Suspicious Activity Report
RIVERSIDE, CA—A former official with Chase Bank has been found guilty of disclosing the existence of a suspicious activity report (SAR) filed with federal officials, and then soliciting thousands of dollars in bribes to help the borrower deal with a possible criminal investigation related to the illegally disclosed SAR.
Frank E. Mendoza, 45, of Victorville, was convicted yesterday afternoon of three counts of bank bribery and one count of unlawfully disclosing a SAR. The federal jury deliberated about 30 minutes before issuing its verdict, which included a not guilty finding on a charge of attempted economic extortion.
Following a one-week trial in United States District Court, the jury determined that Mendoza demanded a $25,000 bribe, ultimately accepted $10,000 in bribes from the customer, and disclosed the existence of a SAR. The Financial Crimes Enforcement Network (FinCEN), a bureau within the Treasury Department that receives SARs from financial institutions around the country, believes Mendoza is the first bank official in the nation to be convicted of criminal charges for revealing the filing of a SAR.
The evidence presented during the trial showed that Mendoza, who worked as a loss mitigation specialist for Chase Bank, conducted an investigation of a delinquent borrower on mortgage loans made in relation to seven properties in Palmdale. In the fall of 2008, Mendoza reported to Chase that he suspected fraud in relation to the mortgages, and the bank in late November 2008 filed a SAR with FinCEN.
Several months later, Mendoza approached the borrower and suggested that he pay $25,000 in exchange for Mendoza’s assistance with Chase and a possible federal criminal investigation related to the loans. In these conversations, Mendoza disclosed the filing of the SAR and asserted that a federal criminal investigation of the borrower was imminent.
Mendoza’s bribery solicitation in May 2009 caused the borrower to contact the FBI. After the borrower delayed paying any bribe money, Mendoza ultimately agreed to accept $10,000 in cash. During two meetings in the borrower’s car in the parking lot of the Mall of Victor Valley, the borrower made two $5,000 payments to Mendoza. Following the second payment on June 29, 2009, special agents with the FBI arrested Mendoza, recovered the second $5,000 payment, and recovered from Mendoza’s wallet two $100 bills that were part of the first bribe payment.
Steven Martinez, Assistant Director in Charge of the FBI in Los Angeles, said: “Dishonest practices by bank employees corrode our banking system and, as evidenced by Mr. Mendoza’s conviction, can have serious consequences.”
Mendoza is scheduled to be sentenced by United States District Judge Robert H. Whaley on May 25. As a result of yesterday’s guilty verdicts, Mendoza faces a statutory maximum penalty of 95 years in federal prison.
“Suspicious activity reports filed by financial institutions with FinCEN provide some of the most useful information available to government authorities in criminal, tax or regulatory investigations or proceedings,” according to FinCEN Director James H. Freis, Jr. “This flow of highly confidential information among financial professionals, FinCEN, and law enforcement depends on the training and trust placed on industry and government officials alike. This case demonstrates the severe consequences that come with betraying that trust, disregarding the Bank Secrecy Act, and ignoring one’s duty as an employee of a financial institution.”
The Financial Crimes Enforcement Network is a bureau within the Treasury Department charged with partnering with the financial industry, law enforcement and regulators to protect the U.S. financial system from criminal abuse. FinCEN administers the Bank Secrecy Act, which is the federal anti-money laundering and counter-terrorism financing statute. The Bank Secrecy Act and FinCEN regulations require certain financial institutions, including all banks, to have Anti-Money Laundering programs in place and to report suspicious transactions and large currency transactions. FinCEN receives approximately one million SARs every year.
The case against Mendoza was investigated by the Federal Bureau of Investigation, which received assistance from FinCEN.
CONTACT:
Assistant United States Attorney Antoine F. Raphael
(951) 276-6246
Assistant United States Attorney Joseph B. Widman
(951) 276-6945
Release No. 11-005
Frank E. Mendoza, 45, of Victorville, was convicted yesterday afternoon of three counts of bank bribery and one count of unlawfully disclosing a SAR. The federal jury deliberated about 30 minutes before issuing its verdict, which included a not guilty finding on a charge of attempted economic extortion.
Following a one-week trial in United States District Court, the jury determined that Mendoza demanded a $25,000 bribe, ultimately accepted $10,000 in bribes from the customer, and disclosed the existence of a SAR. The Financial Crimes Enforcement Network (FinCEN), a bureau within the Treasury Department that receives SARs from financial institutions around the country, believes Mendoza is the first bank official in the nation to be convicted of criminal charges for revealing the filing of a SAR.
The evidence presented during the trial showed that Mendoza, who worked as a loss mitigation specialist for Chase Bank, conducted an investigation of a delinquent borrower on mortgage loans made in relation to seven properties in Palmdale. In the fall of 2008, Mendoza reported to Chase that he suspected fraud in relation to the mortgages, and the bank in late November 2008 filed a SAR with FinCEN.
Several months later, Mendoza approached the borrower and suggested that he pay $25,000 in exchange for Mendoza’s assistance with Chase and a possible federal criminal investigation related to the loans. In these conversations, Mendoza disclosed the filing of the SAR and asserted that a federal criminal investigation of the borrower was imminent.
Mendoza’s bribery solicitation in May 2009 caused the borrower to contact the FBI. After the borrower delayed paying any bribe money, Mendoza ultimately agreed to accept $10,000 in cash. During two meetings in the borrower’s car in the parking lot of the Mall of Victor Valley, the borrower made two $5,000 payments to Mendoza. Following the second payment on June 29, 2009, special agents with the FBI arrested Mendoza, recovered the second $5,000 payment, and recovered from Mendoza’s wallet two $100 bills that were part of the first bribe payment.
Steven Martinez, Assistant Director in Charge of the FBI in Los Angeles, said: “Dishonest practices by bank employees corrode our banking system and, as evidenced by Mr. Mendoza’s conviction, can have serious consequences.”
Mendoza is scheduled to be sentenced by United States District Judge Robert H. Whaley on May 25. As a result of yesterday’s guilty verdicts, Mendoza faces a statutory maximum penalty of 95 years in federal prison.
“Suspicious activity reports filed by financial institutions with FinCEN provide some of the most useful information available to government authorities in criminal, tax or regulatory investigations or proceedings,” according to FinCEN Director James H. Freis, Jr. “This flow of highly confidential information among financial professionals, FinCEN, and law enforcement depends on the training and trust placed on industry and government officials alike. This case demonstrates the severe consequences that come with betraying that trust, disregarding the Bank Secrecy Act, and ignoring one’s duty as an employee of a financial institution.”
The Financial Crimes Enforcement Network is a bureau within the Treasury Department charged with partnering with the financial industry, law enforcement and regulators to protect the U.S. financial system from criminal abuse. FinCEN administers the Bank Secrecy Act, which is the federal anti-money laundering and counter-terrorism financing statute. The Bank Secrecy Act and FinCEN regulations require certain financial institutions, including all banks, to have Anti-Money Laundering programs in place and to report suspicious transactions and large currency transactions. FinCEN receives approximately one million SARs every year.
The case against Mendoza was investigated by the Federal Bureau of Investigation, which received assistance from FinCEN.
CONTACT:
Assistant United States Attorney Antoine F. Raphael
(951) 276-6246
Assistant United States Attorney Joseph B. Widman
(951) 276-6945
Release No. 11-005
Comments
Post a Comment