17 September 2004 LAWFUEL – Best law news, criminal law, attorney, legal, legal research site Marcos Daniel Jiménez, United States Attorney for the Southern District of Florida; and Michael S. Clemens, Special Agent in Charge, of the Federal Bureau of Investigation, announced today that defendants, Dominick Parlapiano, Carlos E. Mendez, and Otto Ambrosiani, were sentenced on charges arising from their involvement in a $173 million scheme to defraud Espirito Santo Bank of Florida Parlapiano was sentenced to twelve and a half (12 ½) years’ imprisonment; Mendez was sentenced to nine (9) years’ imprisonment, and Ambrosiani was sentenced to five (5) years’ imprisonment. All three (3) were ordered to pay restitution to the victim in the amount of $173 million, and all three have agreed to cooperate with the continuing investigation and prosecution of the remaining co-defendants.
On May 11, 2004, Parlapiano, and on May 5, 2004, Mendez, each pled guilty to a conspiracy count, two (2) bank fraud counts, and a wire fraud count, in violation of Title 18, United States Code, Sections 371, 1344, and 1343. On May 7, 2004, Ambrosiani pled guilty to the conspiracy count, in violation of Title 18, United States Code, Section 371.
The charges stem from the decades-long funding relationship between Espirito Santo Bank of Florida and the Bankest entities, a group of factoring companies owned by two other defendants, Eduardo Orlansky and Hector Orlansky. According to the Indictment, the Orlanskys and their co-defendants committed fraud on the bank over the course of that relationship.
Evidence presented by the government at prior hearings showed that Bankest employed numerous sophisticated mechanisms to further, conceal, and disguise this fraud, including: creating and using false invoices; changing dates on old receivables to make them appear current; creating false checks; redacting monthly board meeting minutes before producing the minutes to auditors; cycling money from Bankest to its factoring clients and back again to create the false appearance that the clients were paying down real receivables; and many other techniques and machinations. As a result, monthly reports provided to the bank, as well as the annual audited financial statements for Bankest, were materially false.
Parlapiano was a director of Bankest, and managed significant aspects of the fraudulent scheme under the direction of his co-defendants, Eduardo Orlansky, Hector Orlansky, and R. Peter Stanham. One of the acts Parlapiano committed in furtherance of the fraud was to cause hundreds of thousands of dollars to be wire transferred from Bankest to Enterprise Network Applications (“ENA”), a Georgia company. The purpose of the wire transfers was to place funds in ENA’s account so that ENA could, in turn, transfer those same funds back to Bankest. This created the false appearance on Bankest’s books that ENA was actually making payments on its accounts receivable balance. In truth, the “payments” were a ruse – carried out by the cycling of funds – designed to conceal the fact that ENA’s accounts receivable balance had been fraudulently inflated by tens of millions of dollars.
Mendez was a vice president of Bankest, whose role was to conduct the finances of Bankest in such a way so as to make the false representations about the value of the accounts receivable possible. Ambrosiani handled information technology and computing systems for Bankest, and his role in the fraud included manipulating computer accounting data in such a way that the bank and the auditors would not discover the fraudulent schemes.
Mr. Jiménez commended the investigative efforts of the Federal Bureau of Investigation. The case is being prosecuted by Assistant United States Attorney Stephen Stallings.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at www.usdoj.gov/usao/fls