After FBI arrest, Tom Foley acquitted
Foley acquitted, but Courtney Dupree gets convicted
The NY Daily News reported this weekend Hoboken lawyer Tom Foley (who once ran for city council in the 6th Ward) was acquitted on charges in his role of a $21 million dollar bank fraud scheme. His client Courtney Dupree, a Democratic fundraiser, was convicted – and may serve up to 30 years in prison and pay $18 million dollars in restitution.
Ex-council candidate charged with bank, mail and wire fraud
Another Hoboken political figure has been scooped up by the feds.
Attorney Tom Foley has been charged with bank fraud conspiracy arising out of an alleged scheme to use false financial information to obtain $21 million in bank loans. Foley is a former member of the Zoning Board and 2007 candidate for 6th ward council who lost a runoff election to incumbent Nino Giacchi.
The 42-year old Bloomfield Street resident was arrested on July 23 after a criminal complaint against him was unsealed in Brooklyn Federal Court.
According to the Justice Department, Foley and his co-conspirators orchestrated a scheme to defraud Amalgamated Bank by obtaining loans for subsidiaries of GDC Acquisitions, LLC – a holding company the conspirators controlled – on the basis of false financial statements and misrepresentations. Foley served as Chief Operating Officer of GDC since January, and also acted as the company’s general counsel before joing GDC full-time. Foley left his own Hoboken-based law firm (Foley, Perlman and Campbell) in 2009 to join Lum, Drasco and Positan, where he served as GDC’s outside counsel.
On pages 9 and 10 of the Criminal Complaint obtained by Hoboken411, Foley explains to a confidential FBI informant what may be his defense at trial:
“In or about March 2010, CS-1 visited FOLEY in his office at GDC and spoke to FOLEY about the fraud. CS-1 told FOLEY that the financial information GDC gave to Amalgamated Bank was not accurate. Foley responded that the situation was not a criminal matter or a fraud, but merely a breach of contract issue between GDC and Amalgamated Bank….
On April 24, 2010, a Saturday, CS-1 went into work to prepare accounts receivable figures to give Amalgamated Bank the following Monday. Foley walked over to CS-1’s cubicle and asked what CS-1 was doing in the office. CS-1 said: “cooking the books.”
Foley was in a three-way race for the sixth ward seat in 2007 with Giacchi and Bill Noonan, who missed a runoff by 7 votes. Allies of Carol Marsh and Michael Lenz supported Foley on the streets and in the comments sections of Hoboken411 during the runoff. Foley may have edged Noonan out simply because he shared his name with a popular member of the Elks Club who also runs Senior Services for the city. The Villanova-educated attorney has since been known as “the other Tom Foley.”
More from the Feds on the arrest, after the jump.
The charges were announced by Loretta E. Lynch, U.S. Attorney for the Eastern District of New York, George C. Venizelos, Acting Assistant Director-in-Charge, FBI, New York, and Ronald J. Verocchio, Inspector-in-Charge, U.S. Postal Inspection Service, New York.
As alleged in the complaint, the defendants gave Amalgamated Bank financial information for GDC on which they had fraudulently inflated the company’s accounts receivable in order to obtain initially, and then maintain, credit lines totaling approximately $21 million. For example, the defendants represented to Amalgamated Bank in writing in November 2009 that GDC had $25.2 million in accounts receivable when, in fact, it had only $9 million.
The complaint alleges that the conspirators inflated the accounts receivable by a variety of means, including by booking fictitious sales. In addition, the complaint alleges that the conspirators defrauded Amalgamated Bank by causing GDC to acquire a company covertly, contrary to the terms of their loan agreement, and by concealing the acquisition from the bank.
“The defendants allegedly defrauded an FDIC insured bank out of millions of dollars by lying about their company’s financial condition,” stated U.S. Attorney Lynch. “Those who abuse their positions of influence and trust can expect to be investigated and prosecuted to the full extent of the law.”
“The defendants allegedly committed a multimillion-dollar accounting fraud. They accomplished this by a plan that was as simple as it was audacious. In plain language, they’re charged with cooking the books, grossly overstating receivables, and therefore the company’s bottom line. The alleged misrepresentation isn’t just lying. It’s stealing,” stated FBI Acting Assistant Director-in-Charge Venizelos.
“Postal Inspectors working with the United States Attorney and the FBI are committed to ensuring the integrity of the banking system by investigating and prosecuting those individuals who defraud financial institutions in New York for their personal benefit,” stated Postal Inspector-in-Charge Verocchio.
The charges are merely allegations, and the defendants are presumed innocent unless and until proven guilty. If convicted, each defendant faces a maximum sentence of 30 years’ imprisonment.