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FORMER AUTOMOBILE DEALER TO PAY CIVIL PENALTY FOR BANK FRAUD VIOLATIONS

 BOSTON, Nov. 16 ~PRNewswire~ -- U.S. States Attorney A. John Pappalardo announced today that George G. Najem, of Windham, N.H., has agreed to pay a $10,000 civil penalty as a result of his multiple bank fraud violations.
 More particularly, during 1990 and 1991, Najem was the president of Haverhill Nissan, Inc. of Haverhill, Mass. Under an arrangement with Baybank, Haverhill Nissan was able to obtain financing for its automobile customers. Pursuant to that arrangement, on at least three different occasions, Najem represented to Baybank that Haverhill Nissan had sold automobiles to certain customers, when, in fact, those sales never took place. Based upon Najem's false representations, Baybank advanced the funds for the vehicle purchases to Haverhill Nissan. Najem retained the funds so advanced by Baybank, never provided Baybank with a perfected security interest in the vehicles purportedly sold, and sold those vehicles to yet other buyers. Thus, Najem was able to collect payment on the vehicles twice, once from Baybank based upon the false representations of sales, and once from the real buyers of the vehicles.
 In the absence of a settlement, the United States intended to bring an action against Najem under the civil penalty provisions of Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). Congress enacted Section 951 of FIRREA as an additional means of fighting financial institution fraud. Under the statute, the government may seek civil penalties as an alternative to, or in addition to, any criminal sanctions for certain enumerated financial institution fraud violations.
 This action was handled by Assistant U.S. Attorney David Abelman of Pappalardo's Civil Division.
 -0- 11~16~92
 ~CONTACT: U.S. Attorney's press office, 617-223-9445~


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Publication:PR Newswire
Date:Nov 16, 1992
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