A federal jury found Mendel Zilberberg, former director of Park Avenue Bank in New York, guilty of five counts in connection with a scheme to obtain a fraudulent $1.4 million loan from Park Avenue Bank while he was the bank’s director, according to the Damian Williams, U.S. attorney for the Southern District of New York. The bank collapsed soon after.
Zilberberg, 65, of Monsey, N.Y., was found guilty of conspiracy to commit bank fraud, bank fraud, conspiracy to make false statements to a bank, making false statements to a bank, and misapplication of bank funds.
“Mendel Zilberberg, while working as a practicing lawyer and serving as a director of Park Avenue Bank, ignored his duties and took advantage of the bank, viewing it as the object of his fraud scheme,” Williams said in a release. “Far from helping the bank through a tenuous moment in its existence, Zilberberg was focused on squeezing money out of it for himself, on the basis of lies. The bank collapsed just months after Zilberberg defrauded it.”
According to the indictment, the trial, and public filings, Zilberberg conspired with Aron Fried and others in 2009 to obtain the fraudulent loan from Park Avenue Bank. They recruited a straw borrower, who applied for the $1.4 million loan based on numerous lies directed by Zilberberg and his co-conspirators. Zilberberg used his position as director to ensure that the loan was processed promptly, according to the U.S. Attorney’s Office, Southern District of New York.
Based on the false information in the application and Zilberberg’s involvement in the loan approval process, the bank issued the loan to the straw borrower. Zilberberg received more than $500,000, and the rest was split between Fried and another conspirator. The borrower received nothing from the loan.
The loan ultimately defaulted, resulting in a loss of over $1 million.
On Nov. 15, 2022, Fried pleaded guilty to conspiracy to commit bank fraud. On April 10, he was sentenced to one year and one day in prison.
Zilberberg was found guilty on the five charges following a one-week trial before U.S. District Judge George Daniels. The maximum sentence he faces on all the charges is 125 years in prison. Sentencing is scheduled for Nov. 29 before Judge Daniels.