Fairfield Man Pleads Guilty To Role In $7.4M Embezzlement Scheme: Feds

FAIRFIELD, CT — A 56-year-old Fairfield man, who served as General Counsel at banks for a decade, pleaded guilty in court Friday in connection with a decade-long, $7.4 million embezzlement scheme at banks where he worked, according to authorities.

James Blose waived his right to be indicted and pleaded guilty in New Haven federal court to one count of bank fraud, and one count of engaging in illegal monetary transactions. The guilty plea was announced by U.S. Attorney Vanessa Roberts Avery; Robert Fuller, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation; Harry T. Chavis, Jr., Special Agent in Charge of IRS Criminal Investigation in New England; and Brian Tucker, Special Agent in Charge of the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection’s Office of the Inspector General, Eastern Region.

According to court documents and statements, from approximately 2013 to January 2022, Blose was an attorney and held high-ranking positions, including General Counsel, at Hudson Valley Bank and Sterling National Bank. From approximately January 2022, when Webster Bank acquired Sterling National Bank, until February 2023, Blose served as Executive Vice President and General Counsel and Corporate Secretary at Webster Bank.

From approximately 2013 until Webster Bank discovered his scheme and his employment was terminated in February 2023, Blose was accused of defrauding his employers in various ways, according to prosecutors.

In certain commercial loan transactions where the bank was the lender, Blose was accused of fraudulently retaining for himself portions of closing costs, including legal fees. In certain real estate transactions in which the bank was the seller, Blose was accused of retaining portions of the sale proceeds for himself.

For some other real estate transactions, Blose was accused of creating false documents in order to hide his theft from the bank, and he also stole from the bank in other ways, according to prosecutors.

As part of the scheme, Blose was accused of using his attorney trust accounts to make personal expenditures. Additionally, prosecutors said Blose also transferred funds to accounts in the names of business entities he created and controlled, and then used those funds for his personal benefit.

Through this scheme, Blose was accused of stealing approximately $7.4 million from his employers.

Bank fraud carries a maximum prison term of 30 years, and engaging in illegal monetary transactions carries a maximum prison term of 10 years.

Blose is free on a $250,000 bond pending sentencing, which is scheduled for March 13, 2025, in Hartford.

This investigation has been conducted by the Federal Bureau of Investigation, the Internal Revenue Service – Criminal Investigation, and the Board of Governors of the Federal Reserve System and the Bureau of Consumer Financial Protection’s Office of the Inspector General. Financial crimes investigators from Webster Bank assisted the investigation.

This case is being prosecuted by Assistant U.S. Attorneys Michael S. McGarry and Ross Weingarten.