Purple Tab B013 — Bank Fraud: Criminal Referral Package
GUARDRAIL: PURPLE — STRATEGIC INTEGRATION
Strategy, framework integration, and settlement positioning. References Blue/Red/Brown damages; does not duplicate calculations.
POSTURE NOTE — Track 3 Criminal Referral Package
Document Role. This is the Track 3 (Bank Fraud) Criminal Referral Package for Purple Vol 08. It is designed as an attorney-facing assembly tool to support potential referrals to federal and regulatory channels concerning bank-fraud exposure tied to the Block 2512 collateral (226 Franklin Street / related lots) and the documented covenant-versus-condition mismatch.
Intended Audience: Federal prosecutors (US Attorney EDNY), regulatory investigators (FDIC OIG, NYDFS), and counsel preparing referral submissions.
What This Document Does:
- Assembles referral-ready evidence package structure
- Maps statutory elements to available evidence
- Identifies subjects and witness networks
- Provides documentary collection plan
- Outlines referral submission framework
What This Document Does NOT Do:
- Calculate damages (see Blue Vol 05, Red Vol 06)
- Present courtroom strategy (see B014)
- Provide settlement negotiation tactics (see B015)
- Present raw evidence (see Grey Vol 11, White Vol 07)
PART A — REFERRAL OVERVIEW
A.1 One-Sentence Thesis
Defendants obtained and maintained four successive secured loan transactions across three FDIC-insured financial institutions by making and reiterating maintenance / compliance / environmental covenant representations that contradicted documented chronic building deficiencies on the same collateral.
A.2 Primary Referral Theory
| Statute |
Description |
Application |
| 18 U.S.C. §1344 |
Bank Fraud |
Primary — scheme to defraud / false representations |
| 18 U.S.C. §1014 |
False Statements to Financial Institution |
Alternate — if application certifications obtained |
| 18 U.S.C. §1341/§1343 |
Mail/Wire Fraud |
Supporting — if transmissions occurred |
| 18 U.S.C. §371 |
Conspiracy |
Supporting — if multiple actors coordinated |
A.3 Why This Document Exists (Separation of Concerns)
| Document |
Function |
| Grey Vol 11 |
Evidence-only pattern spine (loan chronology, covenants, conditions, element mapping) |
| Purple T3 |
Strategy memo explaining covenant-misrepresentation theory and leverage posture |
| B013 |
Packaging and referral-ready assembly (what goes in packet; what referral asks for) |
PART B — CHRONOLOGICAL FACT PATTERN
B.1 Verified Four-Loan Pattern (ACRIS Spine)
| Loan ID |
Date |
Lender |
Principal |
Status |
| L-2003-01 |
2003-09-11 |
Flushing Savings Bank, FSB |
$1,162,795.82 |
Superseded |
| L-2008-01 |
2008-09-03 |
National Bank of New York City |
$2,835,669.19 |
Superseded |
| L-2014-01 |
2014-02-19 |
New York Community Bank |
$11,000,000.00 |
Superseded |
| L-2019-01 |
2019-12-31 |
New York Community Bank |
$13,750,000.00 |
In force |
Total recorded principal (aggregate): $28,748,464.01
Collateral hub: Block 2512 (Lots 1 and 72) — 226 Franklin Street (primary)
Evidence anchor: Grey Tab B001 (loan chronology); Grey Tab C001 (elements table)
B.2 Critical Timing Anchor: L-2019-01 Proximity to G21 Flood
| Date |
Event |
Significance |
| October 13, 2019 |
Catastrophic flood event (G21) |
Major condition event |
| December 31, 2019 |
L-2019-01 CMEA recorded |
Loan covenant restatement — 11 weeks post-flood |
Referral significance: What, if anything, was disclosed to NYCB during underwriting/closing regarding the October 2019 flood and developing mold conditions?
PART C — KEY STATEMENTS & EXHIBITS (Centerpiece Evidence)
C.1 Covenant Centerpieces (Recorded Instruments)
The central covenant families relevant to the referral (excerpts in Grey Tab B001):
| Covenant Family |
Representative Language |
Loan Cycles |
| Maintenance/Repair |
"Borrower shall promptly repair, restore, replace or rebuild any and all improvements" |
All four |
| Environmental |
"Borrower shall comply with all Environmental Laws" |
Explicit in L-2019-01 |
| Compliance with Laws |
"Comply with all laws, ordinances, and governmental requirements" |
All four |
| Lawful Occupancy |
Representations regarding legal use and occupancy |
All four |
C.2 Condition Evidence Centerpieces (Contradicting Covenants)
| Evidence |
Date |
Finding |
Source |
| G21 catastrophic flood |
Oct 2019 |
Unit destroyed; displacement |
WT-series |
| Olmsted baseline |
June 2020 |
Moisture 30-40%; mold >5M CFU/in² |
WT-107 |
| ALC PRV report |
Aug 2021 |
Questions remediation completeness |
WT-108 |
| Olmsted response |
Aug 2022 |
Non-completed scope items |
WT-109 |
| Olmsted follow-up |
Nov 2022 |
Visible mold documented |
WT-110 |
| Re-flood event |
July 2023 |
New flooding demonstrating pattern |
WT-111 |
C.3 Referral Packet Attachment Tiers
| Tier |
Status |
Contents |
Purpose |
| Tier 1 |
In hand |
ACRIS PDFs; Grey tables; key WT exhibits |
Establishes pattern and mismatch |
| Tier 2 |
Discovery needed |
Underwriting files; appraisals; certifications |
Proves representations at closing |
| Tier 3 |
Optional |
Banking standards expert |
Explains materiality |
PART D — STATUTORY ELEMENTS → EVIDENCE TABLES
D.1 18 U.S.C. §1344 Working Elements
| Element |
What Must Be Shown |
Evidence Pointers |
| E1 — Scheme |
Pattern of conduct to deceive financial institution |
Grey A000/B001; 4-loan chronology |
| E2 — False Representations |
Material misstatements or omissions about condition/compliance |
Grey B001 covenants + Grey B002 cross-walk |
| E3 — Knowing Intent |
Repetition across 4 loans; escalating principal; notice of conditions |
Grey B002 pattern + Grey B003 tenant impact |
| E4 — Financial Institution |
FDIC-insured institutions |
Grey C001; FDIC confirmation (collection task) |
Note: Grey C001 provides the evidence-only elements table; B013's role is packaging and referral structure.
PART E — SUBJECT AND WITNESS MATRIX
E.1 Primary Subjects
| Role |
Entity/Individual |
Evidence Pointers |
| Borrower/Mortgagor |
American Package Company, Inc. |
Grey C002; White corporate tabs |
| Principal |
Martin C. Kofman |
White corporate profile tabs |
| Lenders |
FSB; NBNYC; NYCB |
Grey B001/C001 |
E.2 Corroboration Witness Network
| Category |
Witnesses |
Evidence Pointers |
| Tenant impact anchor |
Christian Gray (G21) |
Grey B003; WT-106/107/111 |
| F1 chain corroboration |
Kauch → Fesel → Lemons |
Grey B003; WT-209/210/211 |
| Expert condition witnesses |
Olmsted (CIH); ALC Environmental |
WT-107/109/110 |
PART F — DOCUMENTARY EVIDENCE & COLLECTION PLAN
F.1 Priority Collection Requests (for agency or counsel)
| Priority |
Target |
Purpose |
| 1 (Critical) |
L-2019-01 underwriting/closing file |
Tests flood disclosure |
| 2 |
Prior closing files (2003/2008/2014) |
Pattern consistency |
| 3 |
Covenant compliance certifications |
Post-closing representations |
| 4 |
Appraisals and inspection reports |
Condition assumptions at closing |
| 5 |
Internal lender communications |
Knowledge of collateral condition |
F.2 Evidence Already Available (Tier 1)
| Document Type |
Source |
Status |
| ACRIS loan PDFs (all 4 CRFNs) |
Grey B001 index |
Complete |
| Covenant excerpt compilation |
Grey B001 |
Complete |
| Condition-covenant cross-walk |
Grey B002 |
Complete |
| Tenant impact documentation |
Grey B003 |
Complete |
| Elements mapping |
Grey C001 |
Complete |
| Expert reports (Olmsted/ALC) |
WT-107/108/109/110 |
Complete |
PART G — PROSECUTION VENUES & AGENCY PROFILES
G.1 Referral Targets
| Agency |
Jurisdiction |
Role |
| US Attorney — EDNY |
Brooklyn; federal criminal |
Primary referral target |
| FDIC OIG |
FDIC-insured institution fraud |
Parallel notification |
| FBI Financial Crimes |
Federal investigation support |
Coordination |
| NYDFS |
State bank oversight |
State coordination |
| Kings County DA |
State-law theories |
Parallel if pursued |
G.2 Venue Considerations
| Factor |
Assessment |
| Geographic nexus |
Property in Brooklyn (EDNY) |
| Institutional victims |
All three lenders FDIC-insured |
| Pattern duration |
21+ years supports systematic case |
| Current exposure |
L-2019-01 still in force |
PART H — RELIEF SOUGHT
H.1 Requested Agency Actions
| Action |
Purpose |
| Open investigation |
Review whether covenant representations were materially false |
| Issue subpoenas |
Obtain lender closing files and underwriting materials |
| Interview witnesses |
Confirm disclosure/non-disclosure at each closing |
| Assess criminal charges |
Determine whether §1344 elements satisfied |
H.2 Potential Outcomes
| Outcome |
Impact on Civil Case |
| Criminal prosecution |
Maximum settlement leverage |
| Regulatory action |
Institutional pressure |
| No action (insufficient evidence) |
Civil case proceeds independently |
| Referral held in reserve |
Negotiation leverage maintained |
PART I — P-203 INTEGRATION
Track 3 execution is one pillar in the integrated settlement posture. Use P-203 for the consolidated settlement narrative; B013 provides the "bank-fraud referral-ready" lane pack that can be referenced (or held in reserve) in negotiations.
Anti-Fragmentation Principle: Track 3 referral decisions should coordinate with Tracks 1, 2, and 4 to maintain unified posture.
PART J — ATTORNEY REVIEW QUESTIONS
- What is the applicable federal SOL analysis by loan cycle (2003/2008/2014/2019)?
- Can the L-2019-01 closing file be obtained by subpoena or lender cooperation?
- What representations about habitability/compliance were made at each closing?
- Is there a continuing-violation theory based on post-closing covenant certifications?
- What is the cleanest, lowest-risk referral narrative for a regulator/investigator?
- Should lenders be approached as potential victim-witnesses before referral?
PART K — APPENDICES (TEMPLATES)
K.1 Referral Cover Letter (Template Outline)
- Executive summary (one page)
- Loan chronology table (four loans)
- Covenant excerpts (key quotes)
- Condition contradiction summary (with WT pins)
- Request list (underwriting files; certifications; appraisals)
- Contact information and availability
K.2 Exhibit Index (Placeholder)
Exhibit numbering and PDF compilation to be performed after counsel selects final referral posture.
Cross-References
| Document |
Content |
Relationship |
| Grey Vol 11 |
Pattern evidence spine |
Evidence source |
| Purple T3 |
Bank Fraud Strategy |
Strategic framework |
| B014 |
Courtroom Summary |
Trial presentation |
| B015 |
Settlement Playbook |
Negotiation tactics |
| P-203 |
Integrated Settlement Posture |
Coordination framework |
| Green Vol 09 |
Asset Recovery |
Enforcement pathways |
END — Purple Tab B013 — Bank Fraud: Criminal Referral Package v1.2