Tampa Coin Dealer Sentenced for Conspiracy to Commit Bank Fraud
TAMPA, FL—United States District Judge Charlene Edwards Honeywell has sentenced Mark Yaffe (55, Tampa) to 20 months in federal prison for conspiracy to commit bank fraud. As part of the sentence, the Court also ordered Yaffe to pay $3,049,581 in restitution to the bank he had defrauded.
According to court documents, Yaffe was vice-president and principal of National Gold, Exchange, Inc. (NGE), a Tampa-based company in the business of warehousing, retailing, and trading rare coins. NGE entered into a series of loan agreements with Sovereign Bank in which Sovereign agreed to lend up to approximately $35 million to NGE, secured by NGE’s assets. Yaffe signed the loan agreements in his capacity as vice-president of NGE.
The loan agreements put a limit on how much of the $35 million NGE could borrow at any given time, using a formula that considered the value of NGE’s assets. To make the calculation of the formula possible, NGE was required to submit a monthly borrowing base report, along with back-up documents, regarding the value of its assets. The loan agreements also gave Sovereign the right to perform unannounced audits of NGE to verify that NGE had sufficient collateral.
On July 10, 2009, Sovereign began an unannounced audit at NGE. In connection with the audit, on July 11, 2009, Yaffe provided members of Sovereign’s audit team with a false and fraudulent borrowing base report, falsely inflating the value of NGE’s assets. Yaffe included in this report fictitious sales to entities that he knew did not exist, including $2,221,975 in false sales to Rifkin Management, Inc., and $2,623,308 in false sales to Tudor Trust. Yaffe also submitted false invoices to Sovereign purporting to evidence these fictitious sales, and provided contact information for Rifkin and Tudor Trust that was false. An NGE employee reported that Yaffe had instructed the employee to lie to Sovereign officials about the fictitious customers and sales. Yaffe then caused approximately $3,049,581 to be transferred out of two NGE bank accounts that were part of Sovereign’s collateral for the loan agreements, and could have been used to repay NGE’s debts.
This case was investigated by the Federal Bureau of Investigation. It was prosecuted by Trial Attorney Timothy Loper and Assistant United States Attorney Rachelle DesVaux Bedke.