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Four Metal Traders Accused of Fraud

May 14, 2002

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NEW YORK (AP) _ Four executives for a group of New Jersey metal trading companies have been charged with stealing more than $600 million from banks around the world.

``This is larceny as surely as breaking into the bank vault and hauling off bags of cash,″ Jim Sheehan, acting agent in charge of the FBI’s New York office, said Tuesday

Court papers accused the men of carrying out the fraud for the last two years as they operated a group of metal trading companies in Piscataway, N.J., and a metal trading company in London.

Sheehan said the men fraudulently obtained hundreds of millions of dollars in financing by creating ``phantom″ collateral.

J.P. Morgan Chase & Co., Fleet National Bank, PNC Bank, China Trust Bank and others were among the banks swindled.

The defendants allegedly used loan proceeds from one bank to pay down the debt owed to another bank.

If convicted on charges including conspiracy and fraud, each of the defendants could get up to five years in prison.

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