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Court Listens to Bank Fraud Case

A motion was filed by the defendant for summary judgment of the case in its favor. The plaintiff is a Swiss bank that filed a case against the New York Company who committed bank fraud, particularly, fabricated and sold the promissory notes of the bank amounting to $5 million. A New York Criminal Lawyer said the Swiss bank further alleged that the notes sold by the company defendant was part of a global fraud scheme to raise funds in favor of an Italian food conglomerate as payments of loan by the former to the latter.

The bank fraud was conducted through issuance of the notes by one of the company’s subsidiary in Uruguay, which was then sold to a defendant’s affiliate where the Swiss bank purchased the promissory note. The note is with attachments of a guarantee of payment executed by the subsidiary company and a side letter from the affiliated company. The letter contained a certification that the proceeds of the notes will be used to finance the expansion of the Italian food conglomerate and for the upgrade of its industrial plants at various South American countries.

However, during the time of the purchase of the notes, the food conglomerate financial conditions were worsening and the governments of Brazil and Italy conducted criminal investigations of the Italian food conglomerate financial structure due to the financial distress status of the company and such became a public knowledge. The notes purchased by the plaintiff matured in 2004 but have not been repaid. One of the issued notes was then sold to the bank’s affiliate. The Swiss bank also filed a claim on the notes in the bankruptcy proceedings commenced by Italy against the Italian food conglomerate.

The plaintiff alleged that, upon issuance of the note by the defendant, they have full knowledge of the financial situation and inevitable downfall of the Italian food conglomerate, which the Swiss bank is not aware of at that time. They further claimed that the Swiss bank intentionally issued and sold the promissory notes to unsuspecting buyers to limit its risk exposure with their client Italian food conglomerate. As such, a Queens Criminal Lawyer said the case was filed against the New York company for common-law fraud and aiding and abetting fraud so as to be entitled with compensatory damages and punitive damages.

The defendant filed the motion for summary judgment on the ground that the plaintiff failed to present evidence to establish their claim of the company’s awareness of the financial condition of the Italian food conglomerate and their intention to commit bank fraud against the Swiss banks. In addition, the company defendant claimed that it suffered greater loss than the Swiss bank due to collapse of the Italian food conglomerate.

The appellate held that the motion for summary judgment must be denied because there exist issues of material fact that need to be heard before the court. In the decisions of some US cases, it stated that “fraud claims are often not appropriate for summary decision, because motive, intent and subjective feelings are at issue. To succeed on a claim of fraud, a plaintiff must demonstrate the defendant’s representation of a material fact, the falsity of that representation, scienter, reliance and injury to the plaintiff.”

In the case at bar, there are existing triable facts to establish the assertion of fraud committed by the defendant, specifically, whether the New York company acquired knowledge of the food conglomerate’s financial condition, the risks involved for the issuance of the promissory notes and if the defendant had intentionally issued the notes based on a misleading financial statements of the food conglomerate that would result to false statements and conduct of fraud on the part of the defendant.

Some of the admissions of the New York company where that they were shareholders in one of the controlled entity of the conglomerate and that they maintain relationship with the latter. The defendant also had access to information about the financial and bank operations at Italy while the Swiss bank had none. A New York Sex Crimes Lawyer said there were even records to prove that the defendant started a program to help lower the risk caused by the financially distressed Italian food company.

Accordingly, the appellate court denied the motion for summary judgment due to the existence of the triable facts to determine the existence of commission of bank fraud by the defendants.

Commercial companies, especially banks, are exposed from various and big investment risks that require lawyers’ expertise and assistance in the conduct of business to protect its interests and prevent fraud. At Stephen Bilkis and Associates, we have bank fraud attorneys who are considered veterans in the field who could provide you with the necessary legal protections and expert opinions against potential frauds.

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