Virginia Man Pleads Guilty to Massive Bank and Tax Fraud Scheme
Eric H. Menden, 53, of Chesapeake, Va., has pleaded guilty to engaging in a $41 million bank fraud scheme that contributed to the failure of the Bank of the Commonwealth. He also pleaded guilty to a separate six-year historic tax credit scheme that cost state and federal governments over $12 million and investors more than $8 million.
According to the statement of facts filed with his plea agreement, from January 2008 through August 2011, Menden admitted that he and his business partner performed favors for insiders at the Bank of Commonwealth in exchange for preferential lending treatment and assisted insiders in concealing the extent of the Bank’s non-performing assets by purchasing Bank-owned property. At the time of the Bank’s September 2011 failure, Menden and his business partner owed the Bank approximately $41 million and the total approximate loss related solely to the loans outlined in court records is at least $13,263,443.
In announcing the plea, Neil H. MacBride, United States Attorney for the Eastern District of Virginia said, “Today, Eric Menden admitted to carrying out a massive fraud that played a part in the collapse of the Bank of the Commonwealth. Mr. Menden used his relationship with Bank insiders to use the Bank as his own personal ATM. He raked in millions telling big fat lies to get loans, secure funding from investors, and defraud state and federal tax authorities. Over the last few years, many people in this country have begun to understandably question our financial institutions. Unfortunately, this case indicates that those concerns are sometimes well founded.”
Sentencing is scheduled for July 23, 2012, before United States District Judge Raymond A. Jackson. Menden, who pleaded guilty to conspiracy to commit wire fraud, making false statements, and conspiracy to commit bank fraud, faces a maximum penalty of five years in prison for each count faces