Signet Bank, Richmond, VA

Financial Institution
Loan Fraud

Tracing the proceeds in the ‘Bank Caper of the Century’

“BANK CAPER OF THE CENTURY” is how Virginia Business magazine described the way former Signet Bank in Richmond, Va., was victimized by John Reiners, a former Philip Morris executive who obtained more than $300 million in bogus loans through Nelco, a local computer leasing company and a New York computer firm owned by Ruffo.

Briefly, the two men invented a fictitious secret project for which the tobacco company supposedly needed millions of dollars worth of computers. Two Richmond banks and six other international lending institutions relied on the appearance of the Philip Morris name on phony documents prepared by Reiners, their former executive. The “con” was that the $300 million would be lent to Nelco in order to buy computers from Ruffo’s company for leasing to the tobacco company’s secret project.

In reality, Ruffo and Reiners invested the money into the stock market but guessed the wrong way. If profitable, they had an exit strategy, a feature significantly absent in most corporate fraud schemes. Later when one of the lenders became suspicious and started to ask questions, the scheme, despite further deceit, collapsed. Counsel for one of the banks had a requirement to trace the loan proceeds through the various bank accounts for the purpose of recovery. This “caper” was well planned and although convicted, I still give them high marks for their creative efforts to succeed.

pdf Read “Bank Official Saw Apparent Loan Fraud”

pdf Read decision of “United States Court of Appeals, Fourth Circuit”