CRM

FOR IMMEDIATE RELEASE 202-616-2771

THURSDAY, OCTOBER 19, 1995 TDD 202-514-1888

BANK BOARD MEMBER CONVICTED OF CONSPIRING WITH

ATTORNEYS AND REALTORS TO DEFRAUD BANK OF TAUNTON

BOSTON -- Donald K. Stern, U.S. Attorney in Boston,

Massachusetts, Mark D. Seltzer, Director of the New England Bank
Fraud Task Force and Richard S. Swenson, Special-Agent-in-Charge of
the Federal Bureau of Investigation, announced today that Raymond
A. Tedeschi, 51, former member of the board of directors of the
Bank of Taunton and the owner of Tedeschi Real Estate Center, Inc.,
and William O'Neil, 46, former vice president of Tedeschi Real
Estate Center, were convicted by a jury of conspiring to defraud
the bank.
Both men also were found guilty of bank fraud counts based on
specific loan transactions charged in the indictment. The
defendants were acquitted by the jury of other bank fraud counts.
The indictment charged that, to obtain mortgage financing for
real estate transactions between April 1987 and November 1990 and
thereby to profit from real estate commissions and legal fees
associated with the transactions, Tedeschi and O'Neil conspired
with insiders at the Bank of Taunton and with Taunton-area
attorneys and realtors to defraud the bank. The indictment charged
(MORE)
that Tedeschi and O'Neil falsely inflated borrowers' down payments,
falsified the borrowers' income and assets, submitted to the bank
false income tax returns, W-2 forms, and paycheck stubs, concealed
from the bank secondary financing and engaged in other fraud which
they told their customers was "creative financing." Tedeschi and
O'Neil encouraged other realtors at Tedeschi Real Estate Center to
obtain financing for customers by employing these fraudulent
methods.
According to the indictment, Tedeschi and O'Neil lied to the
Bank of Taunton in this way to get approval for more than $2.4
million in fraudulent loans. The loans did not meet the bank's
lending and underwriting guidelines, according to the indictment,
because the borrowers had not made a substantial cash down payment
which the bank required to minimize the likelihood of default.
Sentencing is set for January 10, 1996, before Chief Judge
Joseph L. Tauro.
The jury's verdict brings to five the number of people
convicted in a continuing investigation of fraud against the Bank
of Taunton. Former Bank of Taunton vice president Michael G.
McSweeney, attorney Virginia Leigh Jones, and realtor John J.
Flanagan have each pleaded guilty to related offenses. Jones and
McSweeney are awaiting sentencing.
The case is being conducted by the New England Bank Fraud Task
Force, which was established in 1991 as part of the Justice
Department's campaign to combat fraud against federally insured
(MORE)
financial institutions. Members of the Task Force include the U.S.
States Attorneys' Offices for each of the six New England states,
the Fraud Section of the Department's Criminal Division, the Civil
and Tax Divisions, the FBI, the Internal Revenue Service, and the
Secret Service.
The case was investigated by the FBI and is being prosecuted
by James P. Gillis and Donald C. Lockhart, trial attorneys assigned
to the New England Bank Fraud Task Force.

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