FDIC Inspector General Gaston L. Gianni, Jr. announced
that a California couple was indicted September 5 by a federal
grand jury in Albuquerque on charges of concealing assets and
making false statements to the FDIC, bankruptcy fraud and
The FDIC, acting as receiver of a failed savings and loan,
obtained a $2.4 million judgment in 1990 against Mitchell Brown
through the U.S. Bankruptcy Court for the District of New Mexico
in connection with a loan he had fraudulently obtained from the
failed institution. The debt was nondischargeable through the
bankruptcy, making it collectable by the FDIC.
Brown and his wife, Shirley Joyce Tanga Brown, provided
information through the bankruptcy proceeding about assets
available for collection in 1991. Based on the Browns'
representation of having no assets from which the FDIC judgment
could be collected, the FDIC settled the judgment in 1994 by
accepting a $10,000 cash payment from Mitchell Brown.
According to the indictment, Mitchell Brown did not inform
the FDIC of more than $135,000 he received and used for his
personal benefit between 1989 and 1995. The indictment further
charges that the Browns misled the FDIC by claiming that Mitchell
Brown had no property interest in any business, including any
community property interest with his wife. Brown allegedly did
retain a community property interest in the Elan Fitness Center,
a California health club owned and operated by his wife. The
indictment also charges that the Browns maintained ownership and
control of their residential property in San Rafael, California,
through sham nominee and trust transactions designed to remove the
property from the purview of the FDIC and the bankruptcy trustee.
An indictment is merely an accusation. The defendants are
presumed innocent unless proven guilty.
This case was investigated by the FDIC's Office of
Inspector General and the Federal Bureau of Investigation.
Congress created the Federal Deposit Insurance Corporation in 1933
to restore public confidence in the nation's banking system. The
FDIC insures deposits at the nation's 11,670 banks and savings
associations and it promotes the safety and soundness of these
institutions by identifying, monitoring and addressing risks to
which they are exposed.
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