Former Executives, Lawyer Convicted in Bank Fraud
Two former officials at the Bank of San Pedro and a lawyer were convicted Wednesday of defrauding the bank out of $2.3 million in a scheme that contributed to the financial institution’s failure.
After a five-week trial, a federal court jury returned guilty verdicts against Lance Darryl Oak, 49, who was chief executive and president of the bank; Keith Michael Congleton, 49, who headed the bank’s mortgage division, and William Peter George Double, 52, an attorney with the Redondo Beach firm of Robertson, Double & Boase.
The three defendants and a fourth man who previously pleaded guilty operated through a sham company that purchased millions of dollars of mortgage loans and then sold them to the bank at inflated prices.
The company, Real Estate Financial Instruments Exchangers Inc. (REFIE), acquired about $12 million worth of mortgage loans generated by other financial institutions, according to Assistant U.S. Attys. Randall Lee and Jennifer Lum, who tried the case.
REFIE paid 80% of the loans’ face value, a practice common in the industry, and then sold them to the Bank of San Pedro for full value, causing a $2.3-million loss.
Oak and Congleton created REFIE in 1992 and caused the Bank of San Pedro to buy the mortgage loan pools at inflated prices, according to a federal grand jury indictment.
They were able to conceal the scam from the bank’s board of directors and from state and federal bank regulators by representing that REFIE was an independent loan broker and by concealing their involvement in the company.
Once the $2.3 million was diverted from the bank, Oak, Double and the fourth defendant, Michael Robert Kasino, 61, of Manhattan Beach, laundered the funds through bank accounts in Hong Kong, Britain, Switzerland and Mexico.
Oak was found guilty on four counts of bank fraud, conspiracy to launder money and tax fraud. Congleton was convicted of four bank fraud counts. Double was found guilty of conspiracy to launder bank fraud proceeds, money laundering and obstructing the Internal Revenue Service.
U.S. District Judge Lourdes Baird set sentencing for the three defendants for Feb. 9.