Ventura Man, 42, Is Arrested in Bank Fraud Case

FBI and IRS agents have arrested a Ventura man on suspicion of conspiring with a Fresno couple to swindle two Southern California banks out of nearly $2.5 million, authorities said Tuesday.

The federal agents arrested Patrick Michael Downey, 42, of Ventura on Friday for his alleged role in a series of crimes that revolved around real estate the couple owned in Fresno, according to Charlie J. Parsons, the FBI special agent in charge.

On Monday, U.S. Magistrate Willard W. McEwen in Santa Barbara allowed Downey to be released on $100,000 bond, pending setting of a trial date.

Downey could not be reached for comment Tuesday.

The couple, William Frederick Williams, 48, and Mary Craig Williams, 46, of Fresno, are considered fugitives because they have not been arrested yet on warrants issued Aug. 5, Parsons said in a press release issued Tuesday.

The arrest warrants stemmed from a federal grand jury indictment returned Aug. 5 that accuses Downey and the Williamses of 13 federal violations, including bank fraud, conspiracy, making false statements in loan applications and money laundering.

The indictment alleges that the Williamses obtained a $1.5-million real estate loan for a building and transferred the property to Downey. The couple then defaulted on that loan and had Downey file for bankruptcy to protect the property from creditors, the indictment says.

This, the indictment alleges, is how the scheme began in November, 1987:

The couple applied for the $1.5-million loan from the Antelope Valley Bank in Lancaster for the construction of a medical building, submitting bogus income tax returns in support of the application that claimed a much higher income than they actually earned. The loan was approved in February, 1988.

Two years later, the couple bought a Fresno apartment building and had Downey, a mortgage broker, apply for a $950,000 loan on it from American Savings and Loan Assn. of Irvine. Again, they used falsified income tax returns in support of the loan application, according to the indictment.

In April, American Savings granted the second loan, and in December, the Williamses stopped making payments on it. The following April, they stopped making payments on the Antelope Valley Bank’s $1.5-million loan, too, the indictment says.

In June, 1991, after Antelope Valley Bank filed a notice of foreclosure on the medical building, the Williamses transferred the building’s title to Weststate Financial--a “sham” corporation with Mary Williams as president and no legitimate assets, the indictment says.

The couple then caused Weststate Financial to file for bankruptcy.

On or about January, 1992, after the bank obtained a court-ordered foreclosure, the couple transferred the medical building’s title to Sunwest Pacific Mortgage Services, the company name that Downey did business under, according to the indictment.

Three days later, Downey caused Sunwest Pacific to file for bankruptcy, the indictment says.

“It’s a bank fraud case--a fraud against a federally insured financial institution,” said FBI Agent Gary Auer, regional supervisor in charge of the bureau’s Ventura office. “That’s what the whole business about the bailout of the banks means--people have been defrauding banks.”