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Jun. 14, 2012

Queens Man Who Orchestrated $10 Million Bank Fraud and Bribery Scheme Sentenced in Mahattan Federal Court to 97 Months in Prison

Preet Bharara, the United States Attorney for the Southern District of New York, announced that Christopher Cavounis, who participated in a scheme to fraudulently obtain commercial bank loans, was sentenced today in Manhattan federal court to 97 months in prison. Cavounis pled guilty on December 22, 2011 to one count of conspiracy to commit bank fraud, five substantive counts of bank fraud, and one count of bank bribery. He was sentenced by U.S. District Judge Robert P. Patterson.

Manhattan U.S. Attorney Preet Bharara stated, "Christopher Cavounis and his co-conspirators went to great lengths to mislead banks into issuing millions of dollars of credit. He will now pay for his crimes, and we will continue to work to ensure that this type of fraudówhich ultimately hurts the average consumer looking for a loanódoes not go unpunished."

According to the superseding indictment, the complaint, and statements made during court proceedings:

From 2009 to November 2010, Cavounis, Jagdesh Cooma, Thomas Nuccio, and others fraudulently obtained at least 16 commercial bank loans and lines of credit, receiving at least $10 million from eight different lendersóCapital One Bank, N.A.; Citibank, N.A. ("Citibank"); First Republic Bank; Herald National Bank; New York Commercial Bank; Signature Bank; Sovereign Bank; and TD Bank, N.A. (collectively, the "lenders"). All of these loans are in default. To induce the lenders into providing the loans, Cavounis, Cooma, and Nuccio prepared and then submitted applications and supporting documentation for commercial loans that contained false and misleading information on behalf of empty shell companies with no existing businesses or assets.

As part of the scheme, Cavounis and Cooma also recruited straw borrowers who provided personal identifying information to the defendants in exchange for future payment. In applications for loans from the lenders, the defendants represented these individuals to be the owners or executives of various companies. In addition, Cavounis and Cooma created fraudulent documents, which purported to accurately reflect the personal and financial information of each straw owner and corresponding company and submitted them to the lenders in support of the loan applications. Unbeknownst to the lenders, not only were the straw borrowers totally unaffiliated with the companies, but the companies themselves were neither existing businesses nor had actual earnings or income. In connection with certain applications, Cavounis also assumed the identity of Nuccio and provided financial institutions with a fraudulent driver's license in his name.

In an effort to obtain the loans, Cavounis paid a Citibank employee more than $135,000 in bribes over the course of four months in 2010 to secure approval for several lines of credit. In total, Cavounis personally obtained approximately $2.45 million in loans that were issued to empty shell companies he controlled.

* * *

In addition to his prison term, Cavounis, 31, of Fresh Meadows, New York, was sentenced to two years of supervised release and ordered to pay $8.2 million in forfeiture and more than $7.9 million in restitution.

Thomas Nuccio, 31, of Pomfret, Connecticut, was sentenced by Judge Patterson on May 14, 2012 to one year and one day in prison, followed by three years of supervised release, and ordered to pay $500,000 in forfeiture.

Jagdesh Cooma, 27, of Fresh Meadows, New York, is scheduled to be sentenced by Judge Patterson on June 15, 2012 at 9:30 a.m. and faces a maximum sentence of 30 years in prison.

Mr. Bharara praised the work of the Federal Bureau of Investigation and the Internal Revenue Service.

This case is being prosecuted by the Office's Complex Frauds Unit. Assistant U.S. Attorneys Zachary Feingold and Christopher D. Frey are in charge of the prosecution.

Source: United States Attorney's Office for the Southern District of New York

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