Englewood Developer Demetrakis Gets Probation In Loan Scheme

ENGLEWOOD, NJ — James Demetrakis, the Englewood developer who helped create Bergen County's Gold Coast along the Hudson River, was sentenced to two years probation for his role in a loan scheme that also involved longtime Edgewater developer Fred Daibes.

Demetrakis also received a $75,000 fine from U.S. District Court Judge John Michael for pleading guilty to conspiracy to make false entries to deceive a financial institution and the Federal Deposit Insurance Corp. A spokesperson with the U.S. Attorney's New Jersey District Office confirmed the sentence.

Demetrakis was arrested and charged as part of a related case against noted Edgewater Fred Daibes and Michael McManus. (See related: Major Bergen Developer Charged In Baking Loan Scheme)

Demetrakis faced a maximum of five years in prison and a maximum fine of $250,000.

Demetrakis and Daibes were longtime business partners. Daibes was the founder and, until April 2011, chairman of the board of directors, at Mariner's Bank in Edgewater.

From January 2008 to December 2013, Demetrakis conspired with Daibes and others to run a loan scheme designed to circumvent the lending limits by ensuring that millions of dollars in loans flowed form Mariner's Bank to others and Diabes. He hid from the bank and the FDIC Daibes' beneficial interests in those loans, U.S. Attorney Craig Carpenito previously announced.

Related: Englewood Developer James Demetrakis Admits Role In Loan Scheme

Demetrakis was a nominee for a $1.8 million line of credit and got two of his relatives to be nominees for a $2.6 million loan. They gave the money to Daibes, who arranged to make both the interest and principal payments on the loans.

The loans became delinquent several times when Daibes failed to give Demetrakis and the others the money to pay the loans back, Carpenito previously said.

Daibes and the nominees also did not disclose to Mariner's Bank that, in certain instances, Daibes pledged the collateral for the loans, while, in other cases, he arranged to make both the interest and principal payments on the loans, Carpenito said.

In order to convince Mariner's Bank to approve two of the loans, Michael McManus, the CFO of Daibes Enterprises, signed and provided to Mariner's Bank a false certification attesting to the profitability of gas stations that two of the nominees had pledged as collateral after purchasing them from Daibes in sham transactions, Carpenito said.

After the FDIC investigated one of the loans, Daibes, McManus, and others created and gave a backdated sales contract to them to make it look like one of the nominees had obtained one of the loans from Mariner's Bank in order to pay Daibes for his interest in a real estate venture, Carpenito said.

Email: daniel.hubbard@patch.com