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Wednesday, April 24, 2024 | Back issues
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Bank Accused in $56 Million String of Frauds

FAIRFAX, Va. (CN) - A Tennessee bank demands $8 million from a bank in Virginia, claiming United Bank's former assistant vice president conspired with a man named Osama El-Atari, who duped a string of banks for $56 million. Atari is serving 12 years in federal prison; F&M Bank demands $8 million from United Bank in Fairfax County Court.

F&M, of Clarksville, Tenn., says it gave El-Atari an $8 million commercial loan and accepted a phony life insurance policy as collateral. The bank says United's Sissaye Gezachew, an assistant vice president and senior credit analyst, aided El-Atari in defrauding F&M and the other banks. United Bank is the only named defendant in this case.

In addition to defrauding F&M of $8 million, the Tennessee bank says Gezachew helped El-Atari make off with $20.6 million from United Bank, $4.7 million from Bank of Annapolis, $16 million from Northern Trust Bank and $7.5 million from First Place Bank.

"El-Atari's modus operandi consisted primarily of inducing the defrauded banks to extend commercial loans to him or entities controlled by or affiliated with him purportedly secured by only one form of collateral, i.e. El-Atari's assignment of his right, title and interest in the cash surrender value of an identified cash value insurance policy purportedly issued to El-Atari by Lincoln Benefit Life Insurance Co.," the bank states in its complaint.

After he was arrested in Austin, Texas and sentenced to 12 years in federal prison for bank fraud, El-Atari admitted to F&M's lawyers that "he had collaborators at United Bank who were multiple individuals from 'vice president and down,'" F&M says.

According to the complaint, "Gezachew's material assistance to El-Atari in effectuating the fraudulent scheme included the transmission of false, bogus and forged documents which Gezachew transmitted electronically to El-Atari for intended distribution to defrauded banks."

The bank says Gezachew was still employed by United when he was arrested by the feds in April this year.

It claims El-Atari gave Gezachew payments of $5,000 to $9,999 for his help in falsifying documents they used to get the loans.

In total, Gezachew got $150,000 from El-Atari, says F&M.

The bank claims El-Atari took the $8 million loan from it and laundered it through his United Bank account.

F&M wants United Bank to pay it $8 million in compensatory damages and $16 million in punitive damages for fraud, aiding and abetting, liability and negligence.

F&M Bank is represented by Thomas Lynch with Bradley Arant in Washington, D.C.

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