The former chief executive of a $390 million New Jersey bank and an accomplice have been charged with a scheme to obtain nominee loans from the bank – a charge which included using a false document to deceive the Federal Deposit Insurance Corp. (FDIC), the U.S. Attorney for the District of New Jersey said in a release Wednesday.
If convicted, the pair face prison terms of up to 30 years and maximum fines of $1 million each.
According to the federal prosecutor’s office, Fred Daibes, 61, of Edgewater, N.J., and the former CEO and board chairman of Mariners Bank of Edgewater, N.J. (with $389.6 million in assets), and Michael McManus, 61, of Madison, N.J., the chief financial officer of Daibes Enterprises (a real estate development company), were charged by a federal grand jury with one count of conspiracy to misapply bank funds and to make false entries to deceive a financial institution and the FDIC.
The U.S. Attorney’s office said Daibes was also charged with five counts of misapplying bank funds, six counts of making false entries to deceive a financial institution and the FDIC, and one count of causing reliance on a false document to influence the FDIC.
McManus was additionally charged with four counts of misapplying bank funds, one count of making false entries to deceive a financial institution and the FDIC, one count of causing reliance on a false document to the influence the FDIC, and two counts of loan application fraud. The defendants will have their initial appearances and arraignments at a later date.
According to federal prosecutors, Daibes was the founder and, until April 2011, board chairman of Mariners Bank. “During the relevant time period, Mariners Bank was subject to federal banking regulations that placed limits on the amount of money that the bank could lend to a single borrower (the ‘Lending Limits’),” the U.S. Attorney’s office said. “Between January 2008 and December 2013, Daibes, McManus, and others orchestrated a nominee loan scheme designed to circumvent the Lending Limits by ensuring that millions of dollars in loans (the ‘Nominee Loans’) flowed from the nominees to Daibes, while concealing his beneficial interests in those loans from both Mariners Bank and the FDIC.”
On the allegation of conspiracy to misapply bank funds and to make false entries to deceive a financial institution and the FDIC, the defendants face a statutory maximum term of imprisonment of five years and a maximum fine of $250,000, the U.S. Attorney said. On the allegations of misapplying bank funds, making false entries to deceive a financial institution and the FDIC, and causing reliance on a false document to influence the FDIC, the defendants face a statutory maximum term of imprisonment of 30 years and a maximum fine of $1 million, they said. On the allegations of loan application fraud, McManus faces a statutory maximum term of imprisonment of 30 years and a maximum fine of $1 million.