Banks Gave Fraudsters $10M in Credit, Feds Say

(CN) - Two men face federal fraud and identity theft charges in Manhattan after allegedly receiving over $10 million in credit by submitting phony information to banks.

Christopher Cavounis and Jagdesh Cooma tried to obtain 16 different loans and credit lines from Citibank, Capital One and other banks, according to the indictment.

Starting in 2009, Cavounis and Cooma applied for commercial loans using the names of "empty shell companies that had no existing or legitimate business and no assets," the indictment states.

To secure the loans, the men allegedly recruited straw borrowers to provide personal information, tax returns and bank statements by "promising payments in return for the use of their names and signatures on loan documents."

In at least one case, Cavounis pretended to be one of the straw borrowers and showed a phony driver's license to the banks.

Their scheme fell apart when Citibank froze the funding of one credit line in October 2010 after Cavounis and a straw owner tried to withdraw the entire $450,000 loan just days after opening it.

"After Citibank refused to release the funds, Cavounis made several phone calls to [two Citibank bankers] in which Cavounis threatened the bankers with physical violence unless the loan proceeds became available to him," the indictment says.

Authorities had arrested the men on Nov. 26. They are now charged with four counts of bank fraud and one count of aggravated identity theft. If convicted, they both face up to 30 years in prison on each fraud count, plus at least two years for identity theft.

The case is assigned to U.S. District Judge Robert Patterson. Assistant U.S. Attorneys Zachary Feingold and Christopher Frey are in charge of the prosecution.

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