15-year jail sentence for man involved in $12m credit union and bank fraud

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A 39-year-old Alabama man, Christopher A. Montalbano, was sentenced to 15 years in federal prison for running a fraudulent loan scheme with his 77-year-old father, Gus Montalbano, stealing nearly $12 million from the credit unions and banks.

From 2016 to 2020, the Montalbanos’ crimes resulted in victims at five credit unions and nine banks in multiple states, according to prosecutors for the Northern District of Alabama in Birmingham.

In addition to his prison sentence, U.S. District Judge Annemarie C. Axon last month ordered Christopher Montalbano to pay $11,924,471 in restitution. He pleaded guilty to conspiracy to commit bank fraud, bank fraud and money laundering in November 2021, according to court documents.

Her father pleaded guilty to conspiracy to commit bank fraud and is due to be sentenced in August.

Prosecutors said Christopher Montalbano used front companies to obtain millions of dollars in loans by submitting sham information and documents to financial institutions on more than 140 loans. He used loan funds to pay for an extravagant lifestyle, which included private jet travel, employment of private pilots and a personal assistant, purchase of several high-end vehicles including Lamborghinis and Ferraris, and the purchase of several properties, including a house in a gated community. , a lakeside home and farmland, prosecutors said.

Three of the five credit unions identified in court documents wrote letters to Judge Axon before Christopher Montalbano was sentenced.

Jamie Payton, president and CEO of the $177 million Heritage South credit union, wrote that the Sylacauga, Alabama-based credit union was made aware in February 2018 of certain inconsistencies with Christopher Montalbano’s guarantee and had begun reviewing each of its loans.

Personal loan and loan balances in business entities totaled $591,424,” Payton wrote. “We were able to collect payments over a period of time, but ended up with an imputed amount of $230,913. We had to use many resources during this period and the amount of the charge was significant for our financial institution. We ask that you please take this into account when determining the accused’s sentence.

Timothy Hollern, lead fraud investigator for the $35.3 billion PenFed Credit Union in Tysons, Va., said in a letter that the Montalbanos’ fraudulent actions caused the credit union to suffer a significant loss of over of $300,000.

“Unfortunately, losses from fraud, such as this significant loss caused by the defendants, have a direct impact on PenFed’s operating expenses and the credit union’s ability to effectively serve each of our members,” Hollern wrote. “As we consider the sentence in this case, please keep in mind that not only is PenFed as a whole a victim, but also each of our honest members as victims.”

Besides Heritage South and PenFed, Jessica Watson, supervisor of fraud investigations for the $15.3 billion Alliant Credit Union, told Judge Axon that the Chicago-based credit union suffered a loss of $370,000. due to fraudulent loans which were used by Gus Montalbano to buy a Mercedes, Land Rover, Corvette and Mastercraft boat and trailer, while his son received fake loans to buy a Tesla and Mastercraft boat and trailer.

Other victimized credit unions were the $182 million AlaTrust credit union in Hoover, Alabama, and the $4.4 billion Connexus credit union in Wausau, Wis., court records show.

Banks victimized by father and son included USAA, Bank of the West, Southern States Bank, Peoples Bank of Alabama, BBVA Compass Bank, Equity Bank, BCI Capital, PNC Bank and Cross River Bank, according to court documents.

To further facilitate the bank fraud scheme, Christopher Montalbano created websites for some of his shell companies, including Land Work Tractor & Equipment (LWT&E), previously located in Florida, and then Vincent, Ala. On the LWT&E website, he posted photographs of agriculture and construction. equipment, UTVs and boats that were allegedly in the possession of LWT&E and for sale. However, the majority of these photographs were copied and taken from legitimate equipment dealer websites, prosecutors said.

Additionally, Christopher Montalbano purchased adjacent properties totaling approximately 150 acres in Vincent where LWT&E was allegedly located. It then closed private access roads, which both prevented unscheduled access and significantly limited the ability of lenders to verify LWT&E’s possession of the equipment sold and/or the validity of photos of the equipment. equipment on the LWT&E website, prosecutors said.

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