A former commercial loan officer at a Pittsfield-headquartered credit union has been charged with receiving kickbacks for making bad loans and attempting to defraud the credit union.
Michael Dicenzo, of Pittsfield, was charged on June 17 with four counts of receipt of money through a credit union with intent to defraud, four counts of tax fraud and one count of making false statements to federal officials.
Documents filed with the U.S. District Court in Boston outlined the charges against Dicenzo, who was employed as a loan officer with Greylock Federal Credit Union (GFCU) from September 2004 through September 2009.
"For Greylock, this incident is nearly five years in the past. We discovered and reported the fraud, and we cooperated with authorities to complete a thorough investigation. Insurance has covered most of this loss and we are entering into a restitution agreement with the former lender for the rest," GFCU Executive Vice President John Bissell said in a written statement.
"We have invested significant resources in ensuring that this type of incident does not happen again. Our oversight procedures are very stringent. We have intensified our attention to risk management because of our experiences and because we recognize that crimes like these are impacting the industry as a whole," Bissell continued. "These types of crimes have impacted credit unions and banks both in our region and around the country – it is an industry-wide challenge."
According to court documents, Dicenzo allegedly made 20 loans and several loan modifications to a local businessman "in knowing and intentional violation" of the credit union’s loan policies. Court documents identify the other party only as "Businessman 1" and indicated that he owned and operated several real estate and construction companies in the Pittsfield area.
In exchange for circumventing GFCU’s policies and providing the businessman with funds "far in excess" of what he would normally receive, or be able to repay, Dicenzo allegedly received money and other perks, including check payments, the free use of a house constructed by one of Businessman 1’s companies and free use of a BMW purchased with one of Businessman 1’s GFCU loans, court documents said.
Dicenzo allegedly set up an account in the name of a home design company, into which he deposited approximately $134,773 worth of check payments from the businessman.
According to the court document, Dicenzo also allegedly misappropriated funds from two local social and service organizations whose accounts he supervised, diverting about $48,000 into the aforementioned home design account.
According to the charges against him, from 2006 through 2009, when filing his personal federal income tax returns with the Internal Revenue Service (IRS), Dicenzo allegedly willfully omitted the money deposited into the home design account from the businessman’s kickbacks and the local organizations he defrauded.
When IRS agents interviewed him in March 2010, Dicenzo allegedly lied to them, saying that the loans he made were properly collateralized and intended to help small businesses in the community, that he rented property from the businessman and that Businessman 1 had written him checks to the home design company for work Dicenzo’s wife was doing on newly constructed homes, court documents said.
Dicenzo is scheduled for arraignment on July 23 at 2 p.m. before Judge Mark G. Mastroianni at the U.S. District Court in Springfield.
