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Exec jailed for fraud that killed old bank

  |   Sept. 11, 2012 at 9:32 PM
PHILADELPHIA, Sept. 11 (UPI) -- Pennsylvania lending company executive Joseph Braas was sentenced to 15 years in prison Tuesday for his role in killing one of the oldest banks in the nation.

The 46-year-old Lititz man was hit with the federal prison term for taking part in a sophisticated loan fraud scheme that ultimately sank the Bank of Lancaster County, which had been in existence since 1863, the U.S. attorney's office said in a release. The bank was one of the five oldest banking organizations in the country, the office said.

U.S. District Court Judge Paul S. Diamond also ordered Braas, who was chief operating officer of Equipment Finance LLC, to pay restitution in the amount of $53 million, an amount federal authorities say represents the losses the bank incurred.

EFI was a logging industry lender that provided funding for the purchase of forestry and land-clearing equipment. It was acquired by Sterling Financial Corp. in 2002 and became a subsidiary of the Bank of Lancaster County, which in turn was a subsidiary of Sterling.

Prosecutors said from 2001 through 2007 the defendants orchestrated a scheme to loot the accounts of EFI and falsify the company's books. As a result of the fraud scheme, prosecutors said, Sterling Financial was eventually liquidated.

The other defendants are to be sentenced in the coming months.

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