Former Bank Employee Sentenced to 86 Months in Prison for Million-Dollar Fraud, Bribery, and Money Laundering

April 17, 2010 - NEWARK, NJ—A former construction project manager at two federally-insured banks was sentenced today to 86 months in prison after being convicted at trial on charges of bank fraud conspiracy, soliciting a bribe from a bank contractor, and money laundering, U.S. Attorney Paul J. Fishman announced.

United States District Judge Faith S. Hochberg imposed the sentence today in Newark federal court.

On November 24, 2009, a federal jury sitting in Newark convicted Oliver Chukwuma, 54, of Franklin Township, New Jersey, of defrauding more than $1 million from his former employer, Fleet Bank (“Fleet”), by approving fraudulent invoices submitted by a Fleet contractor, and later, as an employee of Wayne-based Valley National Bank (“Valley”), demanding, receiving, and laundering a $20,000 payment from a Valley contractor. Chukwuma was convicted on all five counts in the Indictment: one count of conspiracy to commit bank fraud; one count of the receipt of a bribe by a bank employee; and three counts of money laundering.

The evidence at trial revealed that Chukwuma was a construction project manager at Fleet Bank between April 2001 and September 2003. In that role, Chukwuma was responsible for hiring contractors to perform work at Fleet facilities and for approving payment to contractors upon their completion of projects. Beginning in April 2001, Chukwuma and a Fleet contractor, Jack Lubin, defrauded Fleet by causing Lubin’s contracting company, Cranford-based Basic Services, Inc., to submit invoices to Fleet for work that Lubin never performed. Trial testimony revealed that Chukwuma, knowing that Lubin had not performed the work and never would perform the work, thereafter approved the invoices and shared in the proceeds of the fraud, which amounted to approximately $1.1 million.

The evidence at trial also revealed that Chukwuma later obtained a job as a construction project manager at Valley. In June 2006, Chukwuma demanded a $20,000 payment from a Valley contractor as a condition of that contractor’s being eligible to bid on future Valley construction projects. Upon receiving the $20,000 payment, Chukwuma laundered the proceeds through a corporate bank account.

In addition to the prison term, Judge Hochberg sentenced Chukwuma to serve three years of supervised release, and ordered him to pay a $40,000 fine and approximately $1.1 million in restitution to Bank of America, the successor corporation to one of the bank victims in the case.

In determining the actual sentence, Judge Hochberg consulted the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant’s criminal history, if any, and other factors. The judge, however, was not bound by those guidelines in determining the sentence. Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Lubin pleaded guilty on August 16, 2006, for his role in defrauding Fleet Bank and awaits sentencing before United States District Judge Mary L. Cooper in Trenton, New Jersey.

Fishman credited Special Agents of the FBI’s Franklin Township Resident Agency, under the direction of Special Agent in Charge Michael Ward, in Newark, New Jersey with the investigation resulting in Chukwuma and Lubin’s convictions.

The Government is represented in this case by Assistant U.S. Attorneys Seth Kosto and Justin Arnold of the Criminal Division in Newark.