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Financial Crimes
01/07/2011

Bank officer sentenced to prison in 12 million dollar bank fraud scheme

MIAMI - Richard Garcia, a former loan officer at Wachovia Bank, was sentenced to three years in prison by Judge Paul C. Huck, followed by 30 months of home confinement for his participation in a $12 million bank fraud conspiracy, following an investigation led by U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations. Garcia was also ordered to pay $10 million in restitution.

From approximately November 2005 through March 2008, Garcia, 29, of Miami, participated in a conspiracy in which false loan applications were submitted to Wells Fargo Bank (formerly known as Wachovia Bank) in order to obtain approximately $12 million in commercial lines of credit.

The fraudulent loan applications contained false information about the borrower's business income, assets, and accounts receivable. They also included false tax returns, bank statements, and personal financial statements in connection with the line of credit applications. Garcia assisted in processing these fraudulent loans on behalf of the borrowers.

As compensation for the false loan applications that were submitted to Wachovia Bank, the borrowers paid a fee of approximately 10 percent of the loan amount, a portion of which was given to Garcia as compensation for his assistance in preparing and processing the fraudulent applications. The fraud scheme has resulted in approximately $10 million in losses to the bank.

The investigation was conducted by ICE HSI in Miami, U.S. Secret Service and the City of Miami Police Department.

The case was prosecuted by Assistant U.S. Attorneys Andrew K. Levi and Richard Gregorie.