A Middletown attorney is facing 30 years in prison for bank fraud at First State Bank, headquartered in Cranford.
Donna Conroy, 57, of Middletown, New Jersey, pleaded guilty before U.S. District Judge Kevin McNulty in Newark federal court to one count of conspiring to make false entries to deceive a bank and bank regulators, and to influence those regulators, and one count of making false entries.
Conroy, working an attorney as a partner in a Cranford law firm, acted as outside counsel to the state-chartered bank, which was one of her law firm’s biggest and most significant clients.
From 2009 to 2010, Conroy and four other co-conspirators engaged in an elaborate scheme designed to deceive the FDIC and others about the financial health of FSB, federal prosecutors said. The other conspirators were not named.
According to documents filed in this case and statements made in court, the three-phase scheme took place from 2009 to 2010.
The first phase was to fraudulently infuse $7 million of capital into First State Bank (FSB).
In the second phase of the scheme, various conspirators caused FSB to make millions of dollars in loans based on material misrepresentations in order to cover up the fraudulent nature of the capital infusion and end inquiries from the bank’s auditors.
The final phase involved lying to the FDIC and FSB, among others, about the fraudulent capital infusion and loans.
The conspiracy count to which Conroy pleaded guilty carries a maximum potential penalty of five years in prison and a fine of $250,000, or twice the gross pecuniary gain derived from the offense or twice the gross loss sustained by any victim.
The count of making false entries carries a maximum potential penalty of 30 years in prison and a fine of $1 million or twice the gross pecuniary gain derived from the offense or twice the gross loss sustained by any victim. Sentencing is scheduled for Aug. 24, 2017.
Connect with NJTODAY.NET
Join NJTODAY.NET's free Email List to receive occasional updates delivered right to your email address!