Short Sentence For Rockland Lawyer In $1.4M Scheme To Defraud Bank

ROCKLAND COUNTY, NY — A Monsey resident who organized a criminal scheme to steal $1.4 million from Park Avenue Bank while he was on its board has been sentenced to 30 months in prison, Damian Williams, the United States Attorney for the Southern District of New York, announced Tuesday.

It's far less than Mendel Zilberberg had faced when he was convicted in 2023.

A federal jury found Zilberberg, 65, guilty of conspiracy to commit bank fraud, which carries a maximum sentence of 30 years in prison; bank fraud, which carries a maximum sentence of 30 years in prison; conspiracy to make false statements to a bank, which carries a maximum sentence of five years in prison; making false statement to a bank, which carries a maximum sentence of 30 years in prison; and misapplying bank funds, which carries a maximum sentence of 30 years in prison.

In or about 2009, prosecutors said, Zilberberg conspired with a co-defendant, Aron Fried, and others to obtain a fraudulent loan from Park Avenue Bank. Knowing that they would not be able to obtain the loan directly, the co-conspirators recruited a straw borrower, who applied for a $1.4 million loan from the bank on the basis of numerous lies, as directed by the co-conspirators.

Then Zilberberg used his privileged position on the bank's board of directors to ensure that the loan was processed promptly, prosecutors said.

Based on the false representations and his involvement, the bank issued the loan. The money was quickly disbursed to Zilberberg and his co-conspirators through multiple bank accounts and transfers, prosecutors said.

Zilberberg received more than $500,000.

The straw borrower received nothing from the loan and ultimately defaulted, resulting in a loss to the bank of more than $1 million.

The bank failed and was closed by regulators in 2010.

Fried pleaded guilty to conspiracy to commit bank fraud On Nov. 15, 2022. On April 10, 2023, U.S. District Judge George B. Daniels sentenced Fried to one year and one day in prison.

Zilberberg was found guilty July 7, 2023 following a one-week trial before Judge Daniels, who imposed today’s sentence.

In addition to the prison term, the 65-year-old was sentenced to three years of supervised release and ordered to pay $1,066,853 in restitution and $506,000 in forfeiture.

"Those entrusted with the stewardship of financial institutions must uphold their responsibilities with integrity, not exploit their positions," Williams said. "Mendel Zilberberg’s manipulation of his roles as a legal practitioner and a director of Park Avenue Bank exemplifies a disturbing breach: one that led to a staggering loss for the institution. Safeguarding the integrity of our financial systems is imperative, and this Office will not tire in our mission to track down those who pose threats to this vital cornerstone of stability."

Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the Federal Deposit Insurance Corporation’s Office of the Inspector General.