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Financial Fraud Law

Webster Bank Fraud Scheme Guilty Plea

 Gary J. Stocking has pleaded guilty to tax charges stemming from his involvement in a scheme to defraud Webster Bank. According to court documents and statements made in court: 

Stocking’s wife, Susan Curtis, was employed in the Property Services Division of Webster Bank, which was responsible for, among other things, the acquisition and leasing of properties for Webster Bank’s Retail Banking business. In approximately November 2007, Stocking formed, at Curtis’ request, a limited liability company called “Equity Realty LLC.” Curtis falsely represented to Webster Bank’s Vendor Management Department that the company was legitimate, and was entitled to certain fees because of real estate transactions entered into by Webster Bank. In fact, Equity Realty LLC never acted as a broker or landlord in any real estate transactions.
Between approximately December 2007 and October 2009, Webster Bank and its vendors made approximately 23 payments totaling more than $1.9 million to the Equity Realty LLC bank account based on false paperwork submitted by Curtis that falsely represented Equity Realty was due a commission as a result of a Webster Bank real estate transaction.
Stocking did not file tax returns on behalf of Equity Realty LLC, or in any way report to the Internal Revenue Service the monies deposited to the Equity Realty LLC bank account. For the 2007, 2008 and 2009 tax years, Stocking willfully failed to report approximately $1.91 million in income, causing a tax loss to the government of approximately $643,885.
Stocking has pleaded guilty to three counts of failing to file a return, supply information, and pay federal income taxes. Sentencing is scheduled for June 23, 2011, at which time Stocking faces a maximum term of imprisonment of three years. Stocking also will be ordered to pay $643,885 in back taxes, as well as any applicable interest and penalties, to the Internal Revenue Service.
On January 20, 2011, Curtis pleaded guilty to two counts of bank fraud and four counts of filing false tax returns stemming from this scheme. She awaits sentencing.
On October 14, 2010, a third defendant involved in the scheme, Kevin Caffrey, pleaded guilty to one count of bank fraud and one count of filing a false tax return. He also awaits sentencing.
As part of this case, the government is seeking the forfeiture of an interest up to an amount of $1,105,790.79 in real property in East Hampton, several automobiles, two Harley Davidson motorcycles, two boats, and boat trailers, approximately $300,000 in artwork, approximately $100,000 in jewelry, and a Steinway piano valued at more than $77,000. The government also is seeking a money judgment in the amount of $7,002,589.85.
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