NORFOLK, Va. (WAVY) - A businessman who helped contribute to the demise of the Bank of the Commonwealth has been sentenced to spend more than a decade in prison.
Eric 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.
A federal judge sentenced Menden to 138 months, or 11 ½ years, as well as three years of supervised release for his role in a $41 million bank fraud scheme and separate historic tax-credit fraud scheme. Menden's crime cost state and federal governments more than $12 million and investors more than $8 million.
"Eric Menden's crimes have had a devastating impact on the Hampton Roads community," said U.S. Attorney MacBride. "A high-school drop-out who worked to own a construction company, Mr. Menden was making a good living doing what he loved. Yet he threw it all away by stealing millions from taxpayers, investors, and the Bank of the Commonwealth. Today's sentence is just punishment for his fraud, along with the steps he's taken to accept responsibility for his actions."
"Today's sentence brings justice and holds Eric Menden accountable for defrauding TARP applicant Bank of the Commonwealth for three years in an elaborate tit-for-tat scheme with bank insiders that contributed to the failure of the bank," said Christy Romero, Special Inspector General at SIGTARP. "Menden received $35 million in bank loans with such preferential treatment that bank employees referred to the bank as 'the Bank of Eric and George.' In return, he conspired with bank insiders to extend-out nonperforming loans, masking their past-due status through tricks such as fraudulent construction draws and Menden's purchase of bank-owned property at inflated prices. I want to thank Neil MacBride and the assistant United States Attorneys on the case who have shown great leadership in holding Menden accountable for his crimes."
MacBride said the statement of facts filed with Menden's plea agreement showed Menden admitted he and his business partner, George P. Hranowskyj, performed favors for bank executives in exchange for preferential treatment. Menden also purchased bank-owned property in order to help hide the bank's non-performing assets.
When the bank collapsed, Menden and his business partner owed the bank about $41 million, MacBride added.
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