Bank Executive Pleads Guilty to Fraud

The former chief financial officer of American West Bank on Monday pleaded guilty to three counts of bank fraud, authorities said.

Michael S. Leon, 37, of Riverside County admitted to FBI investigators that he embezzled more than $280,000 from the San Fernando Valley bank over a four-year period, said Special Assistant U.S. Atty. Steven Jay Katzman.

“It is unusual for this sort of fraud to go undetected for that long,” Katzman said. “But because of his responsibilities he was in a position to cover it up by falsifying the books.”

Leon began diverting funds from the general ledger, operating and expense accounts of American West Bank in January, 1989, according to court records. Leon then purchased cashiers’ checks and money orders and deposited them into his personal checking account, or paid off creditors, Katzman said.

Among other personal expenses, Leon used the money to pay $1,269 in charges on his American Express credit card in 1991 and $6,250 for a membership at the Porter Valley Country Club in 1993, records show.

“We are glad that we caught him,” Katzman said. “It is upsetting when someone in authority does this.”

During the time of the theft, Leon was moving up the bank’s corporate ladder, rising from an assistant vice president to chief financial officer, records show.

With that position came almost sole responsibility for the preparation and approval of the bank’s general ledger entries, reconciliation of the general ledger to accounting records and data processing reports, and payment of the bank’s bills. Leon also had the authority to issue cashiers’ checks and money orders on behalf of American West Bank.

Leon is scheduled to be sentenced in U.S. District Court in Los Angeles on Dec. 12. He is facing a maximum of 90 years, said Katzman, but because he cooperated with investigators he may be sentenced to as little as two years.