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FOR IMMEDIATE RELEASE CRM

WEDNESDAY, JULY 19, 1995 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.
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