Collapse
In 1972, Michele Sindona, a banker with close ties to the Mafia, the purportedly bogus Freemasonic lodge P2, and the Nixon administration, purchased controlling interest in Long Island's Franklin National Bank, from Laurence Tisch, Chairman of Loews Corporation, which owned hotels in Italy. Later the U.S. Comptroller of the Currency declared Tisch an unqualified director for reasons of conflict of interest, paving the way for Sindona to take over Franklin. Sindona paid more than Tisch had paid for the stock. Tisch was later sued by the Federal Deposit Insurance Corporation (FDIC) for breach of fiduciary duty with respect to the sale of his shares to Sindona.
As a result of his acquisition of a controlling stake in Franklin, Sindona finally had a money laundering operation to aid his alleged ties to Vatican Bank and the Sicilian drug cartel. Sindona used the bank's ability to transfer funds, produce letters of credit, and trade in foreign currencies to begin building a banking empire in the U.S. Allegedly Sindona used his influence in the Republican Party and the Nixon administration to ensure that his background did not inhibit his ability to become Vice Chairman and largest stockholder in the bank. Unfortunately Sindona began to suffer huge losses in the foreign exchange markets, and decides to defraud the bank of $30,000,000 to cover his losses, which brought the bank below its capital needs to operate. In mid-1974, management revealed huge losses and depositors started taking out large withdrawals, causing the bank to have to borrow over $1 billion from the Federal Reserve Bank. On 8 October 1974, the bank was declared insolvent due to mismanagement and fraud, involving losses in foreign currency speculation and poor loan policies.
In 1975, Peter Shaddick, the former executive vice-chairman of the bank's international division, pled guilty to fraud. Following their 1979 trial in Federal District Court in New York, Gleason, Paul Luftig, the bank's former president and chief administrative officer, and J. Michael Carter, a former senior vice president, were convicted of falsifying financial records. The Italian lawyer and liquidator of Sindona's Italian financial empire, Giorgio Ambrosoli, provided the US Justice Department with evidence to convict Sindona for his role in the collapse of the Bank. Ambrosoli was killed by a Mafia hitman commissioned by Sindona in July 1979.
In 1980, "mysterious Michele" was convicted in the United States and in 1984 was extradited to Italy. In March 1986, he died of cyanide poisoning while serving a life sentence. Some sources indicate he was murdered, while others indicate he committed suicide. Franklin's assets were later purchased by European American Bank, itself later acquired by Citigroup.
Read more about this topic: Franklin National Bank
Famous quotes containing the word collapse:
“Newspapers are unable, seemingly, to discriminate between a bicycle accident and the collapse of civilisation.”
—George Bernard Shaw (1856–1950)
“The world was a huge ball then, the universe a might harmony of ellipses, everything moved mysteriously, incalculable distances through the ether.
We used to feel the awe of the distant stars upon us. All that led to was the eighty-eight naval guns, ersatz, and the night air-raids over cities. A magnificent spectacle.
After the collapse of the socialist dream, I came to America.”
—John Dos Passos (1896–1970)
“The Roman world is in collapse but we do not bend our neck.”
—Jerome (c. 340–420)