FOR IMMEDIATE RELEASE WEDNESDAY, JULY 19, 1995

CRM 202-514-2007 TDD 202-514-1888

TWENTY-FIVE MILLION DOLLAR BANK FRAUD SCHEMES CHARGED AGAINST MASSACHUSETTS BUSINESSMAN BOSTON, Massachusetts -- A Marlborough, Massachusetts, businessman was charged today with two counts of conspiracy and two counts of bank fraud based on his role in two separate schemes through which over $25 million in loans were fraudulently obtained from two failed Massachusetts banks. The charges were filed today in U.S. District Court in Boston against Peter J. Janeczek, 47. The charges accuse Janeczek with conspiracy and bank fraud based on his role in a scheme through which more than $10 million in loans were fraudulently obtained to finance the sale of condominium units at the Woodcrest Condominiums, a development located in Chelmsford, Massachusetts. The loans were fraudulently obtained from New England Allbank for Savings, a now-defunct bank that was formerly headquartered in Gardner, Massachusetts. Court papers filed charged that Janeczek, who was involved in the development and marketing of real estate in Massachusetts, managed the construction of the Woodcrest Condominiums and recruited buyers to purchase numerous condominium units located at Woodcrest. It also charged that Janeczek assisted buyers he recruited in fraudulently obtaining mortgage loans from New England Allbank to finance their purchase of condominiums at Woodcrest. The information charged that Janeczek prepared falsified personal financial statements for certain of the Woodcrest condominium buyers whom he recruited. The falsified personal financial statements fraudulently misrepresented the buyers' assets and incomes. Janeczek and his co-conspirators arranged for the falsified personal financial statements to be submitted to New England Allbank in support of the buyers' applications for mortgage loans from the bank, which the buyers used to purchase condominiums at Woodcrest. The government also charged that Janeczek instructed a real estate appraiser to prepare appraisals that fraudulently misrepresented the value of four condominium buildings located at the eight-building Woodcrest development. According to the charges, Janeczek caused the appraiser's fraudulent valuation of the four Woodcrest buildings to be submitted to New England Allbank in support of a package of over $10 million in mortgage loans. The mortgage loans were granted by New England Allbank to

finance the purchase of condominiums at Woodcrest by Janeczek, certain of Janeczek's business associates, and other buyers whom JANECZEK and his business associates had recruited. In addition, the charges also said Janeczek and his co-conspirators arranged for buyers of Woodcrest condominiums who financed their purchases with first mortgage loans from New England Allbank to grant the sellers of the condominiums sham second mortgages in connection with the buyers' condominium purchases. Janeczek and his co-conspirators, including the buyers, fraudulently informed New England Allbank that the bank's first mortgage loans were financing 80 per cent of the price that the buyers were paying for their condominiums, and that the sham second mortgages were financing 20 per cent of the price of the condominiums. In reality, contrary to prudent banking practices, New England Allbank's first mortgage loans were financing almost 100 per cent of the purchase price of the condominiums, because the second mortgages were shams that did not involve any substantial financial obligation. Counts three and four charged Janeczek with additional counts of conspiracy and bank fraud based on his role in schemes through which four major loans, which totalled approximately $17 million, were fraudulently obtained from First Service Bank for Savings, a now-defunct bank that was formerly headquartered in Leominster, Massachusetts. The proceeds of the four loans were supposed to have been used by co-conspirators of Janeczek to develop four projects in Massachusetts and New Hampshire. According to the charges Janeczek prepared falsified personal financial statements for use by two of his co-conspirators that fraudulently misrepresented the value of his co-conspirators' assets. The falsified personal financial statements were submitted to First Service Bank in support of the co-conspirators' loan applications. Janeczek is the eighth person to face felony charges in connection with the ongoing investigation of frauds carried out against New England Allbank for Savings. On January 31, 1995, Janeczek's former business associate, Schuyler V. Peck, 48, of Acton, Massachusetts, pleaded guilty. in U.S. District Court in Rutland, Vermont, to nine counts of conspiracy and mail fraud, including one count based on his role in the scheme to defraud New England Allbank in connection with financing the sale of condominiums at the Woodcrest condominium development. Janeczek also is the eighth person to be charged in connection with the ongoing investigation of frauds carried out against First Service Bank. The charges against Janeczek were investigated by special agents of the FBI and are being prosecuted by Fraud Section trial attorneys Russel N. Jacobson, Paul J. Andrews and Robert E. Wallace of the New England Bank Fraud Task Force and by assistant U.S. attorney Robert M. Kinsella of the U.S. Attorney's office in New Hampshire. The charges brought today are part of continuing investigations being conducted by the New England Bank Fraud Task Force. The Task Force was established as part of the Justice

Department's ongoing campaign to combat fraud against federally insured financial institutions. Members of the Task Force include the U.S. 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. Please contact Deborah Smith, New England Bank Fraud Task Force Director, (617) 565-8231 with press inquiries. ### 95-402