Audrey Strauss, the US lawyer for the Southern District of New York, introduced the conviction in Manhattan Federal Court docket of ALAN KAUFMAN for taking part in a scheme wherein KAUFMAN, then CEO of Melrose Credit score Union (“Melrose CU”) ), accepted rent-free housing and financing for the acquisition of his private residence from Tony Georgiton as a reward for approving thousands and thousands of {dollars} in Georgiton enterprise loans on favorable phrases. KAUFMAN was additionally convicted of accepting lavish holidays, together with to Paris and Hawaii, from a media firm and different distributors as a reward for Melrose CU to purchase extra publicity from these corporations. The jury sentenced KAUFMAN immediately after a two-week trial earlier than U.S. District Decide Lewis A. Kaplan. Georgiton pleaded responsible earlier than Decide Kaplan on September 9, 2020.

US Legal professional Audrey Strauss mentioned: “A unanimous Manhattan jury discovered that Alan Kaufman, the previous CEO of Melrose Credit score Union, had accepted luxurious items from Georgiton as a reward for favorable lending charges for his companies. In so doing, Kaufman shirked his fiduciary responsibility to behave in Melrose’s finest pursuits and as a substitute exploited his management of union funds for his personal private acquire. The members of Melrose definitely deserved higher illustration than Alan Kaufman, who positioned his personal egocentric wants above theirs – and due to the work of the FBI, Kaufman and Georgiton are each convicted of federal crimes.

In accordance with the indictment, paperwork beforehand filed within the case and proof offered at trial:

In 2010, Georgiton bought a home in Jericho, New York (the “Jericho Residence”) and allowed KAUFMAN to stay in that home without cost for over two years. Whereas KAUFMAN lived rent-free on the Jericho residence, KAUFMAN personally authorized the refinancing of over $ 100 million in loans to Melrose CU held by a Georgiton-owned firm on favorable phrases. The pinnacle of the Melrose CU Loans Division didn’t approve the loans to Georgiton as a result of, amongst different issues, he felt the phrases have been too favorable and didn’t adjust to Melrose CU’s lending coverage.

In 2011, KAUFMAN sought approval from the Melrose CU Board of Administrators for Melrose CU to buy the naming rights to a ballroom underneath building in Astoria, Queens (the “Melrose Ballroom”). This ballroom was owned by an organization owned by Georgiton. KAUFMAN didn’t speak in confidence to Melrose’s board of administrators that he was dwelling without cost in a home owned by Georgiton on the time he sought board approval for the acquisition of the naming rights. Over the subsequent 5 years, Melrose CU paid the Georgiton Firm $ 2 million for the naming rights to the Melrose Ballroom. KAUFMAN additionally ordered that the naming payment cost be paid one yr earlier than the precise opening of the Melrose Ballroom.

In 2013, KAUFMAN bought the Jericho Residence in Georgiton, with funding largely coming from Georgiton. To buy the Jericho Residence, KAUFMAN contracted a mortgage of $ 200,000 from Melrose CU co-signed by Georgiton and secured by Georgiton’s shares in Melrose CU. Georgiton additionally granted KAUFMAN an unsecured private mortgage of $ 240,000. Georgiton by no means requested cost for this private mortgage and KAUFMAN by no means made cost on this private mortgage. Moderately than repay the mortgage, the next yr, KAUFMAN purchased a used Maserati sports activities automobile for his spouse, price over $ 100,000.

As well as, from 2010 or round 2015, KAUFMAN solicited and accepted lavish holidays and different items price tens of 1000’s of {dollars} from a media firm (“Media Firm-1”) and others. media suppliers, as a reward for KAUFMAN Approval of Advert Spend by Melrose CU. For instance, in 2010, Media Firm-1 paid KAUFMAN and his spouse, who additionally labored at Melrose CU, to journey to Paris, France, and keep on the 4 Seasons George V Paris. In 2012, Media Firm-1 paid KAUFMAN and his spouse to fly to Maui, Hawaii and keep on the 4 Seasons in Wailea. In 2013, Media Firm-1 paid KAUFMAN and his spouse to attend the Tremendous Bowl in New Orleans.

KAUFMAN didn’t search approval for these Vendor Paid journeys from the Melrose CU Board of Administrators, nor did they disclose these Vendor Paid journeys to the Melrose CU Board of Administrators, in violation of Melrose CU’s anti-corruption coverage.

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KAUFMAN was convicted of two counts of bribing an agent of a monetary establishment, every carrying a most sentence of 30 years in jail. KAUFMAN was discovered not responsible on one depend of conspiracy to bribe an official of a monetary establishment. The potential most sentences on this case are prescribed by Congress and are offered right here for informational functions solely, as any conviction of the defendant can be decided by the decide. KAUFMAN is scheduled to look for sentencing earlier than Decide Kaplan on June 23, 2021.

Ms. Strauss praised the distinctive work of the FBI. She additionally thanked the Nationwide Credit score Union Administration for his or her continued efforts, help and help on this matter.

The prosecution of this case is being dealt with by the Workplace’s Advanced Fraud and Cybercrime Unit. US Deputy Legal professionals Dina McLeod, Michael McGinnis and Nicholas Chiuchiolo are in command of the prosecution.