Home motor trade Former CEO of Melrose Credit Union Sentenced to Nearly 4 Years in Prison for Violating Bank Corruption Law | USAO-SDNY

Former CEO of Melrose Credit Union Sentenced to Nearly 4 Years in Prison for Violating Bank Corruption Law | USAO-SDNY



Audrey Strauss, United States Attorney for the Southern District of New York, today announced that ALAN KAUFMAN, who at the time of the offense was the Managing Director of Melrose Credit Union (“Melrose CU”), has been sentenced today to 46 months in prison. KAUFMAN had previously been convicted, after a three-week jury trial, for participating in a program in which he had accepted free housing from Tony Georgiton and hundreds of thousands of dollars in funding for the purchase. of his personal residence, having approved millions of dollars in loans. to Georgiton companies on favorable terms. KAUFMAN was also convicted of taking lavish vacations, including to Paris and Hawaii, from CBS Radio after increasing Melrose CU’s ad buys on CBS Radio. KAUFMAN’s sentence was handed down by US District Judge Lewis A. Kaplan.

American lawyer Audrey Strauss said: “Alan Kaufman accepted lavish gifts from Tony Georgiton as a reward for favorable lending rates for Georgiton companies. In addition, Kaufman agreed to luxury travel and hotel rooms in exchange for approval of advertising spending by Melrose Credit Union on CBS Radio and elsewhere. Kaufman shirked his duty to act in the best interests of the credit union and its account holders, exploiting his position for personal gain. Now, thanks to the work of the FBI, Kaufman will spend time in federal prison for his crimes. “

According to the indictment, documents previously filed in the case and evidence presented at trial:

In 2010, Georgiton purchased a house in Jericho, New York (the “Jericho Residence”), and allowed KAUFMAN to live in that house rent-free for more than two years. While KAUFMAN lived rent-free at the Jericho Residence, KAUFMAN personally approved the refinancing of over $ 100 million in loans to Melrose CU held by a Georgiton-owned company on favorable terms. The Melrose CU Loan Manager did not approve the loans to Georgiton because, among other things, he felt the terms were too favorable and did not comply with Melrose CU’s lending policy.

In 2011, KAUFMAN sought approval from the board of directors of Melrose CU (the “Melrose Council”) for Melrose CU to purchase the naming rights to a ballroom under construction in Astoria, Queens (the “Melrose Ballroom ”). This ballroom belonged to a company which in turn belonged to Georgiton. KAUFMAN did not disclose to Melrose’s board that he was living rent-free in a house owned by Georgiton when he sought approval from Melrose’s board for the acquisition of the naming rights. Over the next five years, Melrose CU paid the Georgiton company $ 2 million for the naming rights to the Melrose Ballroom. KAUFMAN also ordered that the naming fee payment be paid one year before the actual opening of the Melrose Ballroom.

In 2013, KAUFMAN purchased the Jericho Residence in Georgiton, with funding largely coming from Georgiton. To purchase the Jericho Residence, KAUFMAN contracted a loan of $ 200,000 from Melrose CU, co-signed by Georgiton and secured by Georgiton’s shares in Melrose CU. Georgiton also granted KAUFMAN an unsecured “personal loan” of $ 240,000. Georgiton never requested payment on this alleged loan and KAUFMAN never made payment on this alleged loan. Rather than repay the loan, the following year, KAUFMAN bought a used Maserati sports car worth over $ 100,000 for his wife.

Additionally, from 2010 or around 2015, until or around 2015, KAUFMAN solicited and accepted lavish vacations and other gifts worth tens of thousands of dollars from CBS Radio and other media providers, after KAUFMAN approved Melrose CU’s ad spending. For example, in 2010, CBS Radio paid KAUFMAN and his wife, who also worked at Melrose CU, to travel to Paris, France, and stay at the Four Seasons George V Paris. In 2012, CBS Radio paid KAUFMAN and his wife to travel to Maui, Hawaii, and stay at the Four Seasons in Wailea. In 2013, CBS Radio paid KAUFMAN and his wife to attend the Super Bowl in New Orleans.

KAUFMAN did not seek approval of these Supplier Paid Travel from Melrose Board, and did not disclose these Supplier Paid Travel to Melrose Board, in violation of Melrose’s anti-corruption policy. CU.

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In addition to the jail term, KAUFMAN, 62, of Jericho, New York, was sentenced to two years on probation and ordered to confiscate certain property, pay restitution to the National Credit Union Administration in the amount of $ 2 million and to pay a fine of $ 30,000.

On January 11, 2021, Georgiton was sentenced to three years probation, a fine of $ 95,000, forfeiture of $ 286,663.65 and a special condition of nine months of house arrest.

Ms. Strauss praised the outstanding work of the Federal Bureau of Investigation. She also thanked the National Credit Union Administration for their efforts and continued support and assistance on the file.

The prosecution of this case is being handled by the Office’s Complex Fraud and Cybercrime Unit. Assistant U.S. Attorneys Dina McLeod, Michael McGinnis and Nicholas Chiuchiolo are in charge of the prosecution.