San Gabriel Valley : Banker Sentenced After Compounding His Own Guilt

Michael Mahoney may be only 29, but he had moxie and he was willing to use it for personal gain. And now he has a 21-month prison term.

While he was pleading guilty to accepting bribes to guarantee loans, he also masterminded a scheme to defraud a second bank, Assistant U.S. Atty. Nathan Hochman said.

Thursday in U.S. District Court, the Pasadena banker was sentenced to federal prison, and ordered to pay more than $60,000 in restitution to the two banks.

Mahoney, of Downey, pleaded guilty to masterminding two fraud schemes while working at the Bank of Industry in 199O and Pasadena’s Citizens Bank in 1993 and 1994, authorities said.

In October, Mahoney admitted accepting $35,477 in bribes for recommending about 20 U.S. Small Business Administration loans while at the Industry bank. A dozen of the loans went bad, costing taxpayers $2 million, said Hochman. In March he pleaded guilty to three counts of embezzlement and three of lying on SBA loans.

In the Citizens Bank scheme, Mahoney, who was not allowed to accept fees for loans, got a firm owned by his father to submit invoices for processing the loans, Hochman said. That netted him $38,450.

“One day after he signed a plea agreement and four days before he pleaded guilty for the first scheme, he committed the last act of second scheme,” Hochman said. “That’s my definition of chutzpah.”