A man with Columbia County ties was charged last month with “defrauding banks, other financial institutions, retailers, hospitals, and universities out of $50 million” by the FBI, the U.S. Attorney for the Southern District of New York, and the Special Inspector for the TARP program.
Robert Egan, 64, the President of Mount Vernon Money Center (or “MVMC”) was indicted along with his CEO Bernard McGarry, 50, on charges of conspiracy to commit bank and wire fraud, plus six separate counts of bank fraud.
The logo of the company, which has been placed in receivership [PDF], was a tree with foliage made from dollar signs.
Though identified in the indictment as a resident of Bedford Corners in Westchester County, public records also show Egan with a Columbia County phone number, as well as owning an estimated half-dozen or more parcels in the Town of Livingston. He is also identified in some financial press reports as the owner of The Egan Group, a security firm.
The authorities’ press release states that the two men were soliciting and collecting “hundreds of millions of dollars from MVMC’s clients on the false representations that they would not commingle clients’ funds or use the funds for purposes other than those specified in the various contracts between MVMC and its clients.” The Feds argue that Egan and McGarry instead used clients’ cash “to fund tens of millions of dollars in operating losses in MVMC’s businesses, to repay outstanding client obligations, and to enrich themselves at their clients’ expense. ... [T]he cumulative total cash balances represented on the vault inventory reports for all of MVMC’s ATM clients falsely inflated the actual cash held in MVMC’s vaults by tens of millions of dollars.”
The indictment [PDF] alleges that the men engaged in a scheme known as a “playing the float,” in which banks and other clients thought their company was holding and replenishing cash in over 5,000 ATMs via an armored car service, while also providing payroll services to hospitals, schools, and other institutions. If, for example, $70-$75 million were being held for clients in February of this year, in truth only “approximately $20 to $25 million in cash” was said to be on hand. That cash would be “floated” around as needed to help cover for the missing millions, according to the charges.
The “float” apparently came to the attention of officers of Webster Bank, which operated about 160 ATMs that were stocked by Egan’s company, in late January, when they realized they were about $12 million short and the bank notified Federal investigators. Egan is further alleged to have admitted the scheme in a phone conversation apparently tapped and recorded by the FBI.
The pair face up to 30 years in jail and massive fines if convicted. The Feds urge anyone who believes they may have been the victim of this alleged fraud to contact contact the Victim Witness Coordinator at the U.S. Attorney’s Office, Wendy Olsen-Clancy, at (866) 874-8900.