It was at this time that Charles J. Ontological, Sir. , became the president and CEO of the Park Avenue Bank. He also assumed a place on the Banks Board of Directors. Antagonistic was responsible for organizing a group of investors that invested more than $10 million into the Park Avenue Bank in 2004, which had four retail branches In the Manhattan and Brooklyn areas of New York City, and he apparently Impressed those Investors with his previous work in turning around troubled banks (Well and Bray).
In addition to holding CEO, president, and board positions for the Park Avenue Bank, Antagonistic was also involved in a number f other businesses.
Antagonistic was also the 100% owner of Bedford Consulting Group, Inc. , Easy Wealth Group, Ltd. , and the Park Avenue Property and Casualty Insurance Company. Additionally, he had 20% ownership in three properties in Fishkill, NY: one at 1042 Main Street, another at 2 Broad Street, and the last at 48 Jackson Street. Furthermore, Antagonistic also held 20% ownership In a company called TTS Capital.
All of these businesses will play roles In the schemes In which Ontological engaged. In short, Antagonistic abused his position at the Park Avenue Bank by engaging in at least eight different schemes involving fraud and/or misuse of company funds.
In a majority of these schemes, he had help in the form of co- conspirators, none of whose identities have been revealed at this point. The main co- conspirator will be referred to as Mr.. X throughout this paper. Although it is unknown how many people work for him, at least three of Mr.
. Ax’s employees and/or associates also conspired with Ontological. Those three are referred to as Mr.. W, Mr.. Y, and Mr.. Z. Mr.. X became a client of the Park Avenue Bank in 2007, and he brought with him a umber of different businesses, each one of which required a separate account at the Bank.
In the complaint against Antagonistic, those businesses are referred to as the “Oxygen-related entities” and include the following companies: Oxygen Unlimited, LLc; oxygen unsuited II, LLc; RAH; SQ, LLc; River Falls Botanical services; SAD Realty, Inc. ; and TTS Capital, LLC. As was noted above, Ontological had 20% ownership of TTS Capital. As with the businesses that Antagonistic owned, many of the Oxygen- related entities figured into the scams that Antagonistic and his co-conspirators carried out. One additional company that played a key role was the US Insurance Group, or USIA.
USIA also had an account at the Bank, and Oxygen Unlimited had a 25% put option on USIA, which suggests that Mr.. X had a hand in USIA as well. Furthermore, Mr.. Ax’s administrative assistant was an account signer on all of the Oxygen-related entitles as well as on ten SUSIE account. As tatterdemalion, Ontological was Involved in at least eight different schemes in his time at the Park Avenue Bank. One of these involved the leasing and maintenance of the three properties in Fishkill, NY, in which he had partial ownership. Beginning sometime in 2005, the Park Avenue Bank began leasing the house at 1042 Main Street.
The first floor of the house was reserved for the Bedford Consulting Group, which was owned by Antagonistic, and the second floor was used as an office by Bank employees. Additionally, the Bank paid approximately $750,000 to have a storage center built behind the house to accommodate the Banks information technology recovery equipment. The Park Avenue Bank also entered into lease agreements in 2008 for both the property at 2 Broad Street and at 48 Jackson Street. Although Antagonistic indicated that both properties would be used as storage/ assister recovery sites by the Bank, as of 2010, the Bank had yet to use either property in any way.
However, despite using only one of the three properties, the Bank paid out more than $1 million in rent and other expenses to these three properties. At no time was it disclosed that Antagonistic had part ownership of any of these buildings. Another scheme involves another one of the companies that Antagonistic owned – Easy Wealth Group, Ltd. In early 2006, Antagonistic approached one of his associates with a “business opportunity’: Easy Wealth was losing money, and Antagonistic was hoping to recoup his investment. He therefore asked his associate to “take over” the business, promising that the Park Avenue Bank would provide financing.
Antagonistic helped his associate prepare the necessary loan paperwork, making it appear that the associate had owned Easy Wealth since 2004 and omitting any connection with Antagonistic. He also helped to create false documents for the application, including a falsified profit and loss statement for Easy Wealth’s 2005 fiscal year, and false personal financial statements for his associate. Based on the falsified application, the Bank approved a loan of $300,000 to Easy Wealth. At no time as Antibiotic’s ownership or and financial interest in Easy Money disclosed.
In fact, Antagonistic himself personally approved the $300,000 loan. Shortly after his associate was approved for the loan, Antagonistic asked his associate for $70,000 in two interest- free “loans”. Both times, the associate made checks payable to Bedford Consulting Group. Antagonistic finally repaid some of the money in 2008, but never repaid $20,000 of the “loan” nor any of the interest that the associate had to pay on the money. Between May 2006 and June 2009, Antagonistic incrementally approved credit increases to Easy Wealth from the original $300,000 to $400,000.
He also twice extended the loan due date by a year (for a total of two years), and then in April 2009 extended the due date by another 90 days. In June 2009, Easy Wealth ceased to operate and Antibiotic’s associate filed for bankruptcy. At that time, Easy Wealth still owed the Bank the entire $400,000 balance. The Bank therefore had to write off the entire amount of the loan, causing a $400,000 loss. As mentioned earlier, Antagonistic had 20% ownership in one of the Oxygen-related entities, TTS Capital. In November 2008, TTS Capital opened an account at the Park Avenue Bank, but no money was deposited r transferred into that account.
During 2008, Mr.. W, who worked for Mr.. X, wrote two checks against the TTS Capital Account, totaling $67,000. Antagonistic had one of his employees approve the overdraft fees and pay the checks. In November 2009, the bank was forced to write off those overdraft fees, causing a $67,000 loss. At no point In tale was It Lacrosse Tanat Ontological Ana a Atlanta Interest In I SF capita Antagonistic also approved a number of other overdraft fees on various Oxygen-related entities. In fact, as was disclosed in a Department of Justice Press Release, Antagonistic approved “approximately $8. Lion worth of overdrafts” from 2007 to 2009 on various accounts associated with Mr.. X. In exchange for this service, Antagonistic was allowed to use Mr.. Ax’s personal plane. According to witnesses, Antagonistic took at least 10 flights on Mr.. Ax’s plane, none of which Antagonistic paid for. According to the complaint filed against him, Antagonistic flew, among other places, to Phoenix, Arizona, to attend the Super Bowl in February 2008, to Augusta, Georgia, to watch the Masters Golf Tournament, to Florida to visit a relative, and to Panama. Again, at no time was his relationship with Mr..
X disclosed. In 2009, the Bank failed to approve some overdraft fees on some of the Oxygen-related accounts, and some checks written against those account therefore bounced. Mr.. Ax’s administrative assistant informed Antibiotic’s assistant that the free plane rides were over and that Antagonistic could no longer use Mr.. Ax’s personal plane. Perhaps the most notorious scheme in which Antagonistic engaged involved his alleged investment of $6. 5 million into the Park Avenue Bank. According to the IBID and NYSE, banks are rated as “well-capitalized”, “adequately capitalized”, and “intellectualized”.
In August 2008, Antagonistic was informed that the Bank had been downgraded from “well capitalized” to merely “adequately capitalized”. By early October 2008, the Bank had been further downgraded to “intellectualized. ” In order to appease regulators and restore the Banks position, Antagonistic invested what he claimed to be $6. 5 million of his own money into the Bank in exchange for common stock from the holding company. He did this over three separate transactions: a $2. 6 million investment made on October 8, 2008; another $2. 4 million investment made on October 16, 2008; and a final $1. 5 million investment made on November 17, 2008.
In reality, these investments were a sham. The $6. 5 million was actually money from the Bank that was transferred to a variety of accounts and then reinvested into the Bank under the guise of a large personal investment from Antagonistic. On October 6, 2008, Oxygen Unlimited, one of the companies with which Mr.. X was associated, drew down $2. 6 million against an existing line of credit. The money was then deposited on the same day into the Oxygen Unlimited II account. Later that day, the entire amount was then transferred to the SIGH account, with which Mr.. X was also associated. Yet still on the same day, the entire $2. Lion was then transferred from the SIGH account to a Bank of America account for Bedford Consulting Group. As mentioned earlier, Antagonistic owned 100% of Bedford. On October 7, a check written for $2. 6 million from Bedford Consulting Group was deposited into Antibiotic’s personal checking account at the Park Avenue Bank. On October 8, Antagonistic wrote a check to the Bank for $2. 6 million, calling it a personal capital investment. After making this “investment”, Antagonistic wrote a letter to the IBID asking that that Banks status be restored to “adequately capitalized” so that the Bank could continue to accept brokered deposits.
Based on this information, the IBID did in fact grant the waiver and allowed The Park Avenue Bank to “engage in certain brokered deposit transactions” (Bevel). On October 14, 2008, Oxygen Unlimited line of credit was increased to $6. 4 million. On the same day, barely a week after drawing down $2. 6 million, Oxygen Unlimited drew down an allotting amount was deposited into the Oxygen Unlimited II account. On October 15, the $1. 6 million was transferred to the SIGH account. Also on October 15, 2008, Antagonistic approved an $800,000 loan to USIA, which was deposited into the USIA account on he same day.
That brought the total transferred or deposited into the USIA account on October 15 to $2. 4 million. On the same day, SIGH wired $2. 4 million to the Bedford Consulting Group account at Bank of America. Also on the same day, a check for $2. 4 million was issued from the Bedford Consulting Group and deposited into Antibiotic’s personal checking account at the Park Avenue Bank. On October 16, Antagonistic wrote a check to the Bank for $2. 4 million, again calling it a personal capital investment. On November 15, 2008, Antagonistic approved an additional $2. Million in a line of credit to USIA. On November 17, SIGH drew down $1. 5 million from this newly extended line of credit and deposited the money into the SIGH account at the Bank. On November 10, SIGH wired the $1. 5 million to the Bedford Consulting Group account at Bank of America, Just as had previously occurred with the two prior “investments”. On November 10, a $1. 5 million check was issued from Bedford and was deposited into Antibiotic’s personal checking account at the Park Avenue Bank, again, Just as had occurred with the two prior “investments”.
On November 17, Antagonistic made a final “personal capital investment” of $1. Million to the Park Avenue Bank. This brought his total “investment” to $6. 5 million. In exchange for his “investment”, Antagonistic gained 308,349 shares of Park Avenue Bannock, Inc. , the Park Avenue Bank holding company. This brought Antibiotic’s common stock ownership in Park Avenue Bannock to 316, 617 shares, from Just over 1% to approximately 52% of the common stock issued and available. This in effect made him a majority shareholder.
Prêt Barbara, the United States attorney for the Southern District of New York, is quoted by Wiser and Dash as saying that Antibiotic’s personal capital investment “was the functional equivalent of Monopoly money. ” Yet this did not stop Antagonistic from trying to gain as much leverage as he could from his supposed “investment. ” On October 14, 2008, the Treasury Department announced the beginning of the Troubled Asset Relief Program (TARP). On November 14, 2008, the Park Avenue Bank applied for $11,352,480 in TAPER funds.
The application was accompanied by a letter from the Banks outside counsel, who indicated in the letter that the Bank had managed to raise $5 million in capital by October 17, 2008, due to the capital investment by Antagonistic (the additional $1. Million was not yet “invested” at the time of the letter). In addition, according to witnesses, while the application was being reviewed, Antagonistic stressed to the IBID in multiple phone conversations that he had made a sizable personal investment, and that this investment should count favorably toward the Bank getting approved for TARP funds.
And in December 2008, when the Bank sent the IBID its proposed capital restoration plan, it noted as an important matter than Antagonistic had invested $6. 5 million “as part of the effort to stabilize and restore the Banks capital position” (Bevel). Unfortunately for Antagonistic, the Banks financial situation continued to deteriorate while its TARP application was under review, and in February 2009, Antagonistic was informed that the IBID would not be able to recommend the Park Avenue Bank for approval of TARP funds.
The Bank subsequently withdrew its application, later indicating in a press release that the Walworth was completely voluntary Owe to ten Banks change AT pollen regarding TARP funds. Antagonistic is quoted in multiple sources as having said, “l don’t need TARP money, I don’t necessarily want TARP money, we are a strong bank, and management is committed to putting capital in as it is needed. ” To add to Antibiotic’s woes, in April 2009, USIA filed for bankruptcy. As was described earlier, SIGH had an $800,000 loan and another $1. Million in credit that was funneled through various accounts so that Antagonistic could make his “investments”. At the time that USIA filed for bankruptcy, the entire $2. 3 million balance was still outstanding. Antagonistic did not want the $6. 5 million scam uncovered, so he could not risk SIGH defaulting on the $2. 3 million outstanding – it would raise too many red flags. So another scheme was devised in order to pay off the $2. Million that SIGH owed the Park Avenue Bank. In June 2009, SQ, one of the Oxygen-related entities, purchased a majority of stock in General Employment Enterprise, Inc. GEE). Mr.. W became the chairman of GEE’s Board of Directors and appointed Mr.. Y as CEO of GEE. Both Mr.. W and Mr.. Y work for Mr.. X. SQ required GEE to open an account at the Park Avenue Bank and to transfer funds into that account. On July 23, 2009, $2. 3 million was transferred from the GEE account to a Park Avenue Insurance account, which was also at the Park Avenue Bank. As aforementioned, Antagonistic owned Park Avenue Property and Casualty Insurance Company, which is the company with which the Park Avenue Insurance account was associated. The $2. 3 million transfer was authorized by Mr..
Y, who was at the time CEO of GEE. On August 17, 2009, Antagonistic used the $2. 3 million to pay off Gig’s outstanding balance. In order to cover the misappropriation of GEE’s funds, Antagonistic created a bogus 90-day Certificate of Deposit Receipt, which Mr.. Y showed to the GEE Board of Directors when asked about the missing $2. 3 million. In early October of 2009, Antagonistic returned a certification of the CD, falsely indicating that the $2. Million CD existed when in fact it did not. Numerous bank employees have verified that no 90-day, $2. 3 million CD for GEE ever existed.
From November 24 to December 9, 2009, $2. 3 million was wired to the GEE Park Avenue account from various Oxygen-related entities, none of which had business dealing with GEE. The final scam of which Antagonistic is accused involved defrauding two Florida pastors out of $103,940. In 2009, the two Florida pastors and their congregation raised some money to start construction on a church (they currently met at a rented store front, but were hoping for something more permanent). The pastors had met with architects and contractors and were looking into financing options when they met Mr..
Z. As previously mentioned, Mr.. Z worked for Mr.. X. Mr.. Z told the pastors that he could quadruple their money by investing in discounted treasury bonds which would sell at a profit in foreign markets. Mr.. Z provided fabricated “proof” that he had engaged in such transactions previously and that he worked for the Park Avenue Bank in New York. The pastors bought in to the scam and wired $103,940 to the Park Avenue Insurance account at the Park Avenue Bank on July 3, 2009. Antagonistic enthroned the Park Avenue Insurance account, as was previously detailed.
The pastors, of course, never saw a return on their investment, nor have they been able to reclaim any of the original investment. They called the bank, sent letters to the bank, and even visited the bank in New York in an attempt to see Antagonistic, for whom they believed Mr.. Z worked. It all amounted to nothing. In the five weeks following the transfer AT ten Into Nils Park Avenue Insurance account, Ontological wrote $35,000 in checks to Mr.. Z and transferred $60,000 of those funds to his personal checking account. In September 2009, Antagonistic directed his assistant to book a flight for Mr..
Z to Switzerland. On October 27, 2009, Antagonistic was interviewed by IBID examiners and was specifically questioned about the source of the $6. 5 million that he purportedly invested. During the interview, Antagonistic was presented with a diagram that showed the movement of funds from Park Avenue Bank loan proceeds, to Oxygen Unlimited, Oxygen Unlimited II, and USIA, to the Bedford Consulting Group, and ultimately to Antagonistic himself. Antagonistic tried to convince the examiners that the $6. 5 million came from the sale of some of the Bedford stock to Mr.. W, but the numbers did not line up.
On October 30, Antagonistic resigned his position at the bank. On March 12, 2010, the NYSE seized the Park Avenue Bank and appointed the IBID as received. The IBID sold the bank to Valley National Bank out of New Jersey, which immediately took control of operations (Wiser and Dash). On March 15, Charles J. Antagonistic, Sir. Was arrested at his home. He was charged with 10 counts of fraud, bribery, embezzlement, and misappropriation of funds (Wee and Bray). In researching this case, I was struck repeatedly at how Antagonistic was able to get away tit so much without being caught.
While it is true that he was ultimately caught, his shenanigans remained undetected for some time, and when they were brought to light, it wasn’t by the Bank or the Banks auditors, who were conspicuously missing from the complaint filed against Antagonistic. Ironically, Antagonistic was under investigation for 5 months before the claim was filed against him, and he was under investigation because the Ecuador office of the Department of Homeland Security’s U. S. Immigration and Customs Enforcement (ICE) learned of a person interested in engaging in an illegal business deal with Antagonistic.
The matter was turned over first to the New York ICE office, then to the El Dorado Task force, which specifically investigates financial crimes (Wee and Bray, ICE Press Release). All in all, the counts against him read almost like fiction – that one man could have done so much in such a relatively short period of time. And the unnamed co-conspirators makes it read like a business mob story. But unfortunately, it is all true. One man, who “put his personal greed ahead of his professional duties”, helped to bring about the end of he Park Avenue Bank (Prêt Barbara, as quoted in Minister).