Former New Jersey Resident Pleads Guilty to Defrauding U.S. Subsidiary of Foreign Investment Bank of More Than $1.5 Million
TRENTON, NJ—A former New Jersey resident who previously worked for the U.S. subsidiary of a foreign investment bank admitted today that he orchestrated a scheme to defraud his former employer out of more than $1.5 million, U.S. Attorney Paul J. Fishman announced.
Michael Lieberman, 43, formerly of New Jersey and currently a resident of Huntersville, North Carolina, pleaded guilty before U.S. District Judge Mary L. Cooper in Trenton federal court to an information charging him with one count of wire fraud for executing a scheme over the course of two years through which he fraudulently transferred more than $1.5 million from accounts of his former employer to bank accounts he controlled.
According to documents filed in this case and statements made in court:
Lieberman was employed by “Company A,” a United States-based subsidiary of an international investment bank, in its International Settlements Group in Iselin, New Jersey. Company A engaged in and settled cross-border securities transactions and acted as a settlement agent for similar securities transactions entered into by its broker-dealer clients. Company A’s International Settlements Group was responsible for, among other things, wiring funds to settle various securities transactions.
From June 2012 through May 2014, Lieberman devised a scheme to use his position in the International Settlements Group to initiate more than 50 separate fraudulent wire transfers of Company A’s money, directing the proceeds to bank accounts he either owned or controlled. Lieberman then spent Company A’s money for his own purposes, including purchasing a home in North Carolina, making tens of thousands of dollars in credit card payments and spending hundreds of thousands of dollars on hotels, airplane tickets, home furnishings, restaurant tabs and other expenditures.
Lieberman took various steps to conceal his fraudulent activities, including making fictitious entries in Company A’s bookkeeping system and supplying phony documents to others in order to cause them to make false entries in the company’s books and records reflecting fake profits on non-existent transactions.
The wire fraud count to which Lieberman pleaded guilty carries a maximum potential penalty of 20 years in prison and a fine of up to the greatest of $250,000, twice the gain or twice the loss from the offense. As part of the guilty plea, Lieberman must make restitution and forfeit the proceeds of his scheme, including the home in North Carolina he purchased with money from the fraud. Sentencing is scheduled for July 22, 2015.
U.S. Attorney Fishman credited special agents of the FBI under the direction of Special Agent in Charge Richard Frankel in Newark with the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys Paul Murphy of the U.S. Attorney’s Office’s Economic Crimes Unit, Zach Intrater, Chief of the General Crimes Unit, and Barbara Ward of the Asset Forfeiture and Money Laundering Unit, in Newark.
This arrest is part of efforts underway by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorney’s offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants. For more information on the task force, visit www.stopfraud.gov.