Vice President and Treasurer of Preferred Capital Charged with Bank Fraud

William J. Edwards, United States Attorney, today announced that an Information was filed against Kenneth Rabatin, age 48, of Twinsburg, Ohio, alleging one count of bank fraud. Rabatin was the Vice President and Treasurer of a corporation known as Preferred Capital, Inc. Preferred Capital was in the business of providing financing for equipment leases on commercial equipment. The Information alleges that, from on or about October 6, 2004, to December 12, 2004, Rabatin knowingly executed a scheme to defraud financial institutions by pledging leases as loan collateral to Champaign Bank and/or Sky Bank when he knew that the leases had been previously pledged as collateral or sold. The same leases were, in fact, “double-pledged” as an asset of Preferred Capital, to serve as collateral on loans funded by Champaign Bank and/or Sky Bank, when they had already been pledged or sold. As a result of the Rabatin’s alleged conduct, Champaign Bank and Sky Bank, as federally insured financial institutions, sustained losses in the amount of $1,533,304.01.

The sentence in this case, upon conviction, may be determined by the Court after consideration of the advisory Federal Sentencing Guidelines, which depend upon a number of factors unique to each case, including the defendant's prior criminal record, if any, the defendant's role in the offense and the unique characteristics of the violation. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The case is being prosecuted by Assistant United States Attorney Robert J. Patton following investigation by the Federal Bureau of Investigation, Cleveland Division.

An information sets forth charges to which a defendant waives his or her right to have the case presented to a federal grand jury and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.