Bank sues, alleging Westchester lawyer stole $17 million

Friday, January 5, 2007

Bank sues, alleging Westchester lawyer stole $17 million

Timothy O'Connor
The Journal News

WHITE PLAINS - A printing error on bank checks may have opened the door to an alleged $17 million check-kiting scheme by a Harrison real-estate lawyer, according to court papers filed in a civil lawsuit.

The FBI and the U.S. Attorney's Office are continuing their criminal investigation of Anthony Bellettieri, 53, of Pleasantville, the founding partner of the firm Bellettieri, Fonte and Laudonio P.C. Herbert Hadad, a spokesman for U.S. Attorney Michael Garcia, declined to comment.

The bank that handled the firm's accounts lays out the alleged scheme in a civil suit filed against Bellettieri and his firm in U.S. District Court in White Plains. J.P. Morgan Chase filed suit late in December, charging that Bellettieri overdrew the firm's accounts by $17 million between April 2005 and November 2006, and that he used a check-printing error to make it appear that one account was flush when it really was empty.

Murray Richman, Bellettieri's lawyer in the criminal investigation, declined to comment on the civil allegations. But he said he had been in contact with federal authorities investigating the case.

Neal Comer, the lawyer representing Bellettieri's partners - Robert Fonte and Tara Anne Laudonio - said his clients were victims in the case and have spoken to the FBI.

"He took elaborate steps to hide from them and everyone else what he was doing," Comer said.

Bellettieri at first blamed the overdraft on J.P. Morgan, but later admitted he was responsible to repay it, according to court papers filed by the bank's lawyers.

According to the suit, mortgage lenders wired funds into the firm's J.P. Morgan Chase accounts. Bellettieri paid the sellers from those accounts.

But Bellettieri had been using those accounts to take advantage of misprinted checks, the suit charges. One account, a funding account, was used to pay out checks drawn on a disbursement account. The two accounts were processed through different federal reserve banks. But the routing number printed on the disbursement account checks incorrectly gave the impression that they were processed through the same federal reserve bank.

Bellettieri wrote between $15 and $18 million a day worth of checks drawn on the disbursement account and deposited them in the funding account, the lawsuit says. Because of the printing error, J.P. Morgan Chase made the funds available the day the checks were deposited. But there was actually a two- to three-day lag because the two accounts were processed through different federal banks. The money in the funding account should have become available two days after deposit, just as the checks drawn on the disbursement account came due, making for zero-sum transactions.

The lag time created a two-day window where the firm appeared to have more than $15 million in its funding account when, in fact, it had nothing. Bellettieri's firm repeated the cycle every day, according to the suit.

In November, new checks were issued to the firm with the correct routing numbers. That eliminated the two-day window.

Checks to sellers promptly started bouncing, the bank says.

The FBI started investigating shortly after that.

Reach Timothy O'Connor at tpoconnor@lohud.com or 914-694-3523.