FOR IMMEDIATE RELEASE THURSDAY, OCTOBER 19, 1995

TDD

CRM 202-616-2771 202-514-1888

BANK BOARD MEMBER CONVICTED OF CONSPIRING WITH ATTORNEYS AND REALTORS TO DEFRAUD BANK OF TAUNTON BOSTON -- Donald K. Stern, U.S. Attorney in Boston, Massachusetts, Mark D. Seltzer, Director of the New England Bank Fraud Task Force and Richard S. Swenson, Special-Agent-in-Charge of the Federal Bureau of Investigation, announced today that Raymond A. Tedeschi, 51, former member of the board of directors of the Bank of Taunton and the owner of Tedeschi Real Estate Center, Inc., and William O'Neil, 46, former vice president of Tedeschi Real Estate Center, were convicted by a jury of conspiring to defraud the bank. Both men also were found guilty of bank fraud counts based on specific loan transactions charged in the indictment. The defendants were acquitted by the jury of other bank fraud counts. The indictment charged that, to obtain mortgage financing for real estate transactions between April 1987 and November 1990 and thereby to profit from real estate commissions and legal fees associated with the transactions, Tedeschi and O'Neil conspired with insiders at the Bank of Taunton and with Taunton-area attorneys and realtors to defraud the bank. The indictment charged (MORE) that Tedeschi and O'Neil falsely inflated borrowers' down payments, falsified the borrowers' income and assets, submitted to the bank false income tax returns, W-2 forms, and paycheck stubs, concealed from the bank secondary financing and engaged in other fraud which they told their customers was "creative financing." Tedeschi and O'Neil encouraged other realtors at Tedeschi Real Estate Center to obtain financing for customers by employing these fraudulent methods. According to the indictment, Tedeschi and O'Neil lied to the Bank of Taunton in this way to get approval for more than $2.4 million in fraudulent loans. The loans did not meet the bank's lending and underwriting guidelines, according to the indictment, because the borrowers had not made a substantial cash down payment which the bank required to minimize the likelihood of default. Sentencing is set for January 10, 1996, before Chief Judge Joseph L. Tauro. The jury's verdict brings to five the number of people convicted in a continuing investigation of fraud against the Bank

of Taunton. Former Bank of Taunton vice president Michael G. McSweeney, attorney Virginia Leigh Jones, and realtor John J. Flanagan have each pleaded guilty to related offenses. Jones and McSweeney are awaiting sentencing. The case is being conducted by the New England Bank Fraud Task Force, which was established in 1991 as part of the Justice Department's campaign to combat fraud against federally insured (MORE) financial institutions. Members of the Task Force include the U.S. States 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. The case was investigated by the FBI and is being prosecuted by James P. Gillis and Donald C. Lockhart, trial attorneys assigned to the New England Bank Fraud Task Force. # # #