twitter linkedin
facebook google+

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from

Mortgage News Reprints
Put entire stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed stories free on your Web site or for your RSS reader.

News Archives
Archive of stories by month going back to 1999.

Press Releases
Reports and announcements from

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News


Mortgage News

HOT Topics









site map

Mortgage Fraud News | Fraud Statistics | Fraud Index | Fraud Blog
Mortgage broker, originator and banker criminal cases. Real estate flipping and appraisal fraud. Mortgage fraud prevention, studies and analysis.

P R E S S   R E L E A S E


Oct. 15, 2012

Hampton Roads Business Man Sentenced To 168 Months For Elaborate Bank And Tax Fraud

NORFOLK, Va. George P. Hranowskyj, 47, of Chesapeake, Va., was sentenced today to 168 months in prison for carrying out elaborate and sophisticated fraud schemes that contributed to the failure of the Bank of the Commonwealth and defrauded investors and the government of millions of dollars.

Neil H. MacBride, United States Attorney for the Eastern District of Virginia; Juan C. Molina, Acting Special Agent in Charge of the FBI's Norfolk Field Office; Rick A. Raven, Special Agent in Charge of the Internal Revenue Service Criminal Investigation's Washington, D.C., Field Office; Christy Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP); and Jon T. Rymer, Inspector General of the Federal Deposit Insurance Corporation (FDIC-OIG), made the announcement after sentencing by United States District Judge Raymond A Jackson.

"Mr. Hranowskyj's agreement to perform personal and professional favors for Bank insiders in exchange for unfettered access to millions of dollars in credit exposes the ugly underbelly of how certain insiders treated the Bank of the Commonwealth as their personal piggy bank," said U.S. Attorney MacBride. "His sentence of 14 years in prison sends a strong and unequivocal message that white collar criminals will be held accountable for the often devastating impact of their crimes on our communities."

"Today's sentence marks another chapter in bringing to justice those individuals who were responsible for the wanton fraud that so pervaded the financial dealings of the Bank of the Commonwealth," said FBI Acting SAC Molina. "I want to thank the agents, prosecutors and supporting staff for their unwavering commitment to reveal these wide-ranging criminal misdeeds; they have served the public, and in particular the Hampton Roads community, well."

"Hranowskyj treated this bank like he owned it, calling himself 'Big Daddy' to bank employees, overdrawing his accounts by $600,000, and demanding that the bank 'lower his rates ASAP' and cash his employees' paychecks even though his account was in the red," said Christy Romero, Special Inspector General for TARP (SIGTARP). "If the bank did not do what he wanted, he threatened to stop participating in a vast fraud where he helped senior bank executives extend-out bad loans, pretending that they were current on the bank's books, and bid up bank-owned property at auction using the bank's own money. Hranowskyj and his partner, Eric Menden, leveraged such control over the bank due to this scheme, that bank employees called it the 'Bank of Eric and George.' The $40 million fraud scheme perpetrated by these partners in crime contributed to the failure of the bank, a failure that left the entire Tidewater area without an important source of lending. SIGTARP and our law enforcement partners will bring to justice all those responsible for all fraud that drove Bank of the Commonwealth into the ground."

"Today's sentencing is fitting punishment for one of the principal perpetrators of the complex fraud scheme contributing to the failure of the Bank of the Commonwealth and related losses to the Deposit Insurance Fund," said FDIC Inspector General Rymer. "The American people can be assured that the Federal Deposit Insurance Corporation Office of Inspector General will continue to partner with law enforcement colleagues in efforts to ensure the safety and soundness of our nation's banks and the viability of the insurance fund."

"Criminal conspiracies involving financial fraud of this magnitude are often described as a house of cards, the underlying structure often times falls apart and exposes the individuals' responsible without warning," said IRS SAC Raven. "Mr. Hranowskyj's contribution to the Bank of the Commonwealth's criminal conspiracy was significant, and today's sentence restores public confidence in our system of justice."

Hranowskyj pled guilty on July 12, 2012 to conspiracy to commit wire fraud and conspiracy to commit bank fraud.

According to court records, from January 2008 through August 2011, Hranowskyj and his business partner, Eric H. Menden, 53, of Chesapeake, Va., performed favors for insiders at the Bank of Commonwealth in exchange for preferential lending treatment and assisted insiders in concealing the extent of the Bank's non-performing assets by purchasing Bank-owned property.

At the time the Bank failed on September 23, 2011, Hranowskyj and his business partner were the Bank's largest lending relationship together, the partners guaranteed approximately $41 million in loans. Almost all of these loans were on an interest-only basis, and the two men were regularly permitted to overdraw their accounts. According to court records, Hranowskyj obtained loans simply by sending an e-mail to a Bank insider asking for money to purchase a Hummer or beach-front property. The close relationship between Hranowskyj, Menden, and Bank insiders caused employees at the Bank to sometimes refer to the Bank of the Commonwealth as "the Bank of Eric and George."

Court records indicate that in November 2008, the Bank sent to the Federal Reserve an application requesting approximately $28 million from the Troubled Asset Relief Program (TARP). Based on its regulator's concerns about the health of the Bank, the Federal Reserve later requested that the Bank withdraw its TARP application, which the Bank did.

In July 2010, the Bank entered into an agreement with the Federal Reserve and other regulators that specifically prohibited the Bank from extending, renewing, or restructuring any loans to specific troubled borrowers, which included Hranowskyj and his business partner.

In addition to the fraudulent conduct involving the Bank of the Commonwealth, Hranowskyj was sentenced for a separate scheme aimed at illegally profiting from historic rehabilitation tax credits. In this scheme, Hranowskyj and Menden systematically falsified invoices for large construction projects and used them to apply for federal and state historic tax credits. They had no personal use for the tax credits, but they instead sold them to investors in need of reducing their own tax liability.

In total, corporate investors paid Hranowskyj and his business partner approximately $8.7 million for illegitimate tax credits. As a result, the United States of America suffered a loss of approximately $6.2 million and the Commonwealth of Virginia suffered a loss of approximately $6.3 million.

Menden pled guilty for his role in these fraud schemes on April 12, 2012, and was sentenced on Sept. 26, 2012, to 138 months in prison.

This ongoing investigation is being conducted by the FBI's Norfolk Field Office, IRS-CI, SIGTARP, and the FDIC-OIG, with cooperation from the Virginia Department of Historic Resources and U.S. Department of the Interior National Park Service. Assistant United States Attorneys Melissa E. O'Boyle, Katherine Lee Martin, and Uzo Asonye are prosecuting the case on behalf of the United States.

This investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President's Financial Fraud Enforcement Task Force (FFETF), an interagency national task force.

The FFETF was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys' offices and state and local partners, it's the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit

A copy of this press release may be found on the website of the United States Attorney's Office for the Eastern District of Virginia at Related court documents and information may be found on the website of the District Court for the Eastern District of Virginia at or on

Source: United States Attorney's Office for the Eastern District of Virginia

mortgage fraud case stories

mortgage fraud headlines

mortgage fraud blog

Mortgage Daily headlines

Local Mortgage Fraud news
News about local mortgage fraud.

Logout forgot

Mortgage Fraud Statistics
Government and private data on volume of mortgage fraud activity.

Mortgage Fraud Index
Dollar and index amount by quarter and state.

Mortgage Fraud Litigation
Lawsuits and settlements invoving mortgage fraud by a lender insider. From 2007 through first-quarter 2013

Mortgage Fraud News
News stories about fraud committed against home lenders.

Mortgage Fraud Blog
Actions in mortgage fraud criminal and civil cases.

local mortgage fraud

mortgage fraud links

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter


mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders