Marvin Jemal, the former chief executive officer of a New York-based luggage manufacturer, was arrested and charged Thursday for a fraudulent scheme to obtain millions of dollars in loans by making false statements and providing false and fraudulent documents to a commercial bank based in New York.
After being arrested at John F. Kennedy International Airport, Jemal appeared in Manhattan federal court and was charged with one count of conspiracy to commit bank fraud, one count of bank fraud, one count of making a false statement to influence bank action and one count of money laundering. The Brooklyn resident was released on a $100,000 personal recognizance bond co-signed by a financially responsible person, with any travel restricted to the U.S. Jemal also surrendered his travel documents.
The office of Preet Bharara, the U.S. attorney for the southern district of New York, which released the news in conjunction with the FBI’s New York Field Office, did not identify Jemal’s company or the bank in question.
In August, the luggage company’s former chief financial officer, Mark Bernstein, was arrested and pled guilty in October before U.S. District Judge Robert Patterson for his role in the alleged beat-the-bank scheme. According to allegations in the indictment unsealed Thursday and other documents previously filed in Manhattan federal court, from 2007 through October 2009, “Jemal and Bernstein engaged in a scheme to fraudulently induce the bank to lend millions of dollars to the company. Among other things, Jemal and Bernstein knowingly made false representations to the bank, concealed material facts from the bank, and submitted false and fraudulent documents to the bank, including fabricated invoices and shipping documents. In total, the company obtained approximately $6.9 million in loans from the bank and defaulted on approximately $6 million of those loans.”
Bharara said, “As alleged, former ceo Marvin Jemal and another executive at his luggage company set out to fleece a bank into lending their company millions of dollars by submitting documents loaded with lies and backing them up with false statements. Those millions were then allegedly funneled to Jemal’s personal accounts and used for mortgage payments and payments on a Porsche, among other things.”
In the fall, Bernstein of Belle Harbor, N.Y., pled guilty to one count of conspiracy to commit bank fraud, one count of bank fraud, and one count of making a false statement to influence bank action, each of which carries a maximum sentence of 30 years in prison. He also pled guilty to one count of wire fraud and one count of money laundering, each of which carries a maximum sentence of 20 years in prison. He has yet to be sentenced.
The 60-year-old Jemal’s charges — one count of conspiracy to commit bank fraud, one count of bank fraud, and one count of making a false statement to influence bank action — each carry a maximum sentence of 30 years in prison, and his one count of money laundering carries a maximum sentence of 20 years in prison. Jemal is due back in court March 3 before U.S. District Judge Valerie E. Caproni. Jemal pled not guilty to all counts Thursday.