US Attorney – Further Conviction In $80 MIllion Export-Import Bank Scam

WASHINGTON – LawFuel – Legal Newswire – A federal jury in Los Angeles today convicted the owner of Serv-Ease Office Systems Inc., a Glendale, Calif., company, for his role in a $1.3 million scheme to defraud First International Bank of Connecticut (FIB) and the Export-Import Bank of the United States (Ex-Im Bank), Acting Assistant Attorney General of the Criminal Division Matthew Friedrich and U.S. Attorney for the Central District of California Thomas P. O’Brien announced.

After a four day trial, the jury found Carlos Serrano, 63, of Glendale, guilty on both counts charged in the indictment: conspiracy to commit bank fraud and bank fraud. Sentencing is scheduled for Jan. 26, 2009. At sentencing, Serrano faces a maximum of 35 years in prison.

At trial, the jury heard testimony that in approximately November 2000, Serrano met with co-conspirators Marilyn G. Ong and Ildefonso Ong Jr., and agreed to act as an exporter in a loan transaction between a company in the Philippines and FIB, in which the Ex-Im Bank acted as guarantor. According to trial testimony, Serrano’s sole job in the transaction was to obtain a $200,000 down payment from the Philippine company, purchase $1.3 million in U.S. goods on behalf of the Philippine company, ship the purchased goods to the Philippine company and certify to FIB and the Ex-Im Bank that he had purchased and shipped those goods. The jury heard testimony that Serrano contacted U.S. suppliers using a fake name for the purpose of obtaining price quotes, but that he never actually purchased any goods. Jurors also heard testimony that Serrano certified in documents sent to and relied upon by FIB and the Ex-Im Bank that he had purchased $1.3 million in U.S. goods and shipped those goods to the Philippines. In reliance on Serrano’s false statements, once FIB received the certifications from Serrano, testimony revealed that FIB sent Serrano $1.1 million in loan proceeds. Upon receipt of the loan proceeds, testimony revealed that Serrano paid himself approximately $28,000, sent approximately $949,000 to co-conspirator Ildefonso Ong Jr., and sent approximately $160,000 to a company in Singapore. The evidence indicated that as a result of the fraud, the Ex-Im Bank lost approximately $960,000.

The case is part of a broader investigation into an $80 million scheme to defraud the Ex-Im Bank between November 1999 and December 2005. To date, eight individuals – Serrano, Daniel Curran, David Villongco, Edward Chua, Christina Song, Robert Delgado, Edward Javier and Jaime Galvez – have been convicted for their involvement in the fraud scheme. Curran was sentenced on April 23, 2008, to 41 months in prison; Villongco was sentenced on Feb. 29, 2008, to 33 months in prison; Chua was sentenced on May 14, 2008, to serve 37 months in prison; Delgado was sentenced on Oct. 5, 2007, to 24 months in prison; Javier was sentenced on July 18, 2008, to six months in prison; and Galvez was sentenced on Jan. 7, 2008, to 12 months in prison. Song is scheduled to be sentenced on Oct. 2, 2008. The substantial assistance provided by Curran, Villongco and Chua in ongoing criminal investigations was taken into consideration by the court at sentencing.

In addition, four other individuals – Marilyn Ong, Ildefonso Ong Jr., Nelson Ti and Joseph Tirona – have been indicted by a federal grand jury in the District of Columbia for their alleged involvement in the scheme.
This case was prosecuted by Trial Attorney Hank Bond Walther of the Criminal Division’s Fraud Section and Jason P. Gonzalez of the U.S. Attorney’s Office for the Central District of California. The case was investigated by the U.S. Postal Inspection Service and the FBI.

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