U.S. Attorney’s Office
December 30, 2015
Western District of New York
Former Bank Vice President is Sentenced to More Than Three Years for Fraud
BUFFALO, NY—U.S. Attorney William J. Hochul Jr. announced today that Michael Whipple, 43, of Williamsville, NY, was sentenced by U.S. District Judge Elizabeth A. Wolford to 39 months’ incarceration, and ordered to pay restitution in the amount of $5,332,397. In addition, the defendant will be placed on supervised release for a period of three years once released from incarceration.
Assistant U.S. Attorney Trini E. Ross, who is handling the case, stated that between 2008 and November 2013, Whipple, an M&T Bank Vice President, devised a scheme to defraud the bank involving creation and origination of fraudulent “funding loans.” These loans were created in the names of entities which were credit worthy, or made by the defendant to appear credit worthy. The proceeds were then given to entities of Whipple’s choosing.
As part of the scheme, Whipple forged signatures on loan documentation related to the origination of many of the “funding loans” and had mail diverted to locations other than the credit worthy clients’ addresses to avoid detection. When customers questioned the defendant regarding irregularities in their loan accounts, Whipple told them it was a mistake or a bank error and promised to correct the problem. These problems were never corrected as the defendant stated they would be and he subsequently covered the irregularities up through the creation of new funding loans.
In addition, the defendant caused official checks drawn on M&T Bank to be created to fund the fraudulently originated loans. Similar to a Ponzi scheme, the defendant used some of the proceeds from the fraudulent loans to make payments on the previously obtained fraudulent loans in order to avoid detection by the bank and the customers whose credit was fraudulently used.
At the time the scheme was discovered, there were at least 12 funding loans fraudulently created by Whipple. As a result of the defendant’s actions, M&T Bank suffered a loss of $5,332,397.
The sentencing is a culmination of an investigation by Special Agents of the Federal Bureau of Investigation and Special Agents of the Internal Revenue Service, Criminal Investigation Division, under the direction of Shantelle P. Kitchen, Special Agent in Charge, New York Field Office.