Local businessman sentenced to 14 years

NORFOLK, Va. (WAVY) - A Chesapeake businessman will spend 14 years in federal prison for an elaborate scheme that defrauded investors and the government and contributed to the demise of the Back of the Commonwealth.

Local and federal investigators announced the sentencing of George Hranowskyj Monday. “His sentence of 14 years in prison sends a strong and unequivocal message that white collar criminals will be held accountable for the often devastating impact of their crimes on our communities," said Neil H. MacBride, United States Attorney for the Eastern District of Virginia.

Hranowskyj pleaded guilty in July to conspiracy to commit wire fraud and conspiracy to commit bank fraud. He faced a maximum combined sentence of 25 years.

In September, his business partner, Eric Menden, was sentenced to 11 ½ years. Menden entered a guilty plea in April to conspiracy to commit wire fraud, making a false statement to a government agency and conspiracy to commit bank fraud.

When the Bank of the Commonwealth failed on September 23, 2011, Hranowskyj and Menden guaranteed approximately $41 million in loans.

"Hranowskyj treated this bank like he owned it, calling himself 'Big Daddy' to bank employees, overdrawing his accounts by $600,000, and demanding that the bank 'lower his rates ASAP' and cash his employees' paychecks even though his account was in the red," said Christy Romero, Special Inspector General for TARP (SIGTARP).

The partners were also sentenced for a separate scheme aimed at illegally profiting from historic rehabilitation tax credits.

The investigation was coordinated by the Virginia Financial and Securities Fraud Task Force, an investigative arm of the President’s Financial Fraud Enforcement Task Force (FFETF).