PHONY EXECUTIVE DUPED BANK LENDERS, FBI SAYS.

Byline: Martha Slud Associated Press

Posing as a Philip Morris executive, a former employee of the tobacco giant spun a fantastic tale of a top-secret, offshore cigarette research project to secure approval of $323 million in loans from at least six banks, the FBI says.

Edward J. Reiners, 51, of Somers, N.Y., and a woman accused of being his accomplice - Judy Rose Bachiman, a 38-year-old secretary from Cliffside Park, N.J. - were arrested Tuesday on bank fraud charges.

The FBI said Reiners and Bachiman used Philip Morris stationery and posed as executives of the food, tobacco and real estate company, which has a healthy credit rating.

It was not immediately known how much of the loan money actually got out of the banks or where the money is. Two banks alone estimated their losses at up to $141 million.

Reiners, claiming to be Philip Morris' chief operating officer, said the money would be used to lease computers for research into "future cigarette alternatives" - a venture he said was called "Project Star" and would have to be conducted offshore for privacy reasons, according to the FBI.

Before leaving Philip Morris in 1992, Reiners had done business with one of the bank officials.

Experts said the case indicates that bankers may be lax in security when they believe they are dealing with Fortune 500 companies.