Bank of Newport Accuses Customer of Fraud : Finance: The institution says it lost $4.5 million in an equipment lease scheme. U.S. attorney’s office in Los Angeles is investigating.

The Bank of Newport, trying to rebuild after several years of turmoil, said Monday that a corporate loan customer has defrauded it of $4.5 million in an equipment lease scheme.

The bank said it expects its insurance to cover the loss.

The U.S. attorney’s office in Los Angeles said it is investigating the allegation of fraud and that a Costa Mesa couple who operate the leasing company are cooperating.

In typical lease financing, a bank lends money to a company to purchase equipment, such as trucks or computers. The company then leases the equipment to other businesses at a rate that will cover monthly payments on the loan and provide a profit.

In a news release, Bank of Newport said a longtime customer that buys and leases trucks and heavy equipment began last year to take out loans and issue leases on equipment it never bought. Some lessees even told the bank that they received the equipment when, in fact, they had not, the bank said. The news release said that payments made by those lessees had been reimbursed by the bank’s customer.

Assistant U.S. Atty. Richard Robinson confirmed that the borrowers were cooperating with the investigation, but he said that it was “premature to discuss any disposition” and that “no pleas have been entered yet.”

The couple’s lawyer would not comment Monday. The telephone number for their home was disconnected.

The Bank of Newport has been trying to correct a series of loan problems that have caused it to lose $7.5 million over the past two years. Regulators have restricted its operations and demanded that the bank raise more money from investors.

Insiders have pumped in more cash to raise the bank’s level of capital, its final reserve against losses, but an offering to shareholders was canceled in February, partly because the bank continued to post operating losses.