Document in Bank Fraud Case Discusses Preferential Treatment

(Source: Tim McGlone The Virginian-Pilot (MCT) — From the beginning of the government’s criminal case against former Bank of the Commonwealth executives, prosecutors have alleged that certain customers received preferential treatment in exchange for favors performed for the executives.

Other than a kitchen remodeling job, information about those favors has not been publicly released.

Now, a new court filing in the case describes many of the favors that customer George Hranowskyj allegedly performed for Edward J. Woodard Jr., the bank’s longtime president, and others.

Hranowskyj, who pleaded guilty in the case and is cooperating with the government, wrote in a letter that he and his former partner built a personal gym for bank executives at no charge, paid for safe deposit boxes at the bank’s request with no need to use them, footed the bills for trash removal from bank offices in the old Wainwright building, and sponsored the bank’s annual golf tournament – “even though we don’t play golf.”

And there was this seemingly odd request: The bank’s former board chairman, “Richard Tavss, has requested that we install and remove the ‘circus tent’ at his cemetery each of the past four years. We complied.” Tavss, a lawyer, was a longtime bank director.

Though the letter has no cover sheet or signature, Hranowskyj intended it for Woodard. It is unclear whether it was actually sent. The letter is among 1.2 million documents that the government turned over to each defendant.

The letter was filed by attorney Jeremiah Denton III, who represents Woodard’s son, T. Brandon Woodard, in the case. Denton filed a motion last week asking the judge in the case to force federal prosecutors to turn over specific evidence linking his client to the crimes alleged.

The Woodards, two bank executives and two developers were charged in a 25-count indictment in July alleging a Ponzi-like bank fraud scheme that led to the collapse of the Norfolk-based bank. The Woodards have maintained their innocence.

Denton declined to comment on what he filed, but his motion says that he filed the Hranowskyj letter because it reveals no statements or acts by Brandon Woodard linking him to the alleged crimes.

Denton also revealed in the motion that he and Brandon Woodard met with prosecutors before the indictment.

“The meeting in reality was nothing more than an opportunity for the government to suggest that Brandon tell all, throw himself on the mercy of the prosecutors, and see what happened next. Brandon was offered nothing in exchange,” Denton says in the filing.

Denton also wrote that “the most notable disclosure was an email from an irate father telling his son (Brandon) to be less aggressive when incurring debt to fund projects and to be more accountable for his own unsuccessful investment projects.”

The Hranowskyj letter says that the bank – it doesn’t specifically say who – directed Hranowskyj and his former partner, Eric Menden, to “bail out” Brandon Woodard, who was struggling to keep up with payments on his real estate investments.

Part of the indictment alleges that Hranowskyj and Menden obtained hundreds of thousands of dollars in bank loans to buy Brandon Woodard’s properties, with some of that money being used to pay off other bank loans.

Hranowskyj, in his letter, is clearly upset that he was no longer considered “a friend of the bank” and was being forced to pay back principal on what he thought were interest-only loans, at increased interest rates as well. He called the change in terms a bank-imposed “workout plan.”

“This poor excuse of a workout plan is not acceptable to us under any circumstances,” the letter says. “There is no part of this that is acceptable.”

Hranowskyj and Menden have since lost most of their real estate holdings, either through foreclosure or by government seizure. Hranowskyj’s lawyer, James Broccoletti, declined to comment.

As for the “circus tent,” there remains no public explanation why Tavss needed one for one day each year. Tavss has not replied to many phone calls from The Pilot in recent months.

Tim McGlone, 757-446-2343, tim.mcglone@pilotonline.com

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Source: Tim McGlone The Virginian-Pilot (MCT)