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Edward J. Reiners was no small-time con man. While working for Philip Morris in computer systems until 1992, Reiners had represented his employer in dealings with at least one bank.
Using those connections after he left Philip Morris, Reiners embarked on a road of deceit and fraud that led to an estimated bounty of $323.5 million.
He and his alleged cohort, Judy Rose Bachiman, were recently arrested in Rye Brook, New York, and are facing charges of bank fraud. The penalty for their folly may be 30 years in prison and a $1 million fine.
Reiners began his scam by contacting the Bank of Montreal in 1993 and telling them he wanted to arrange computer lease financing through a computer supplier, Nelco Ltd., on behalf of his employer. There was one glitch, however, he advised – the project he was working on was called “Project Star” and it involved tobacco alternatives. Reiners claimed it was a secret research project – so sensitive and top secret, in fact, that participating banks could not contact anyone at Philip Morris except him. The ruse was made easier because Reiner’s letters were on official Philip Morris stationary that he had taken with him when he left Philip Morris. In the letters, Reiner claimed to be the Chief Operating Officer.
The Bank of Montreal was not the only lending institution that fell for the con. Other lenders involved included Core-States, Hitachi American Credit, Credit Anstaldt, Nations Bank and Long Term Credit Bank of Japan. Each was part of a loan syndicate organized by Signet Banking Corp. based in Richmond.
It took nearly three years for the extensive network of fraud to begin unraveling. The ruse began falling apart when Long Term Credit Bank of Japan attempted to confirm Reiners’s identity via a facsimile to an official of Philip Morris. The company’s assistant corporate secretary, Diane McAdams, responded with a fax of her own. “This is a phony certificate. Mr. Edward J. Reiners is not an elected officer of the Philip Morris Companies Inc. I do not know a Mr. Edward J. Reiners and the signature that appears on the certificate is not mine.”
Nations Bank, a Charlotte-based, $187 billion industry giant, learned of this and began its own investigation of the matter. With $60 million still outstanding, Nations Bank began asking questions of Signet and Nelco officials. Reiners, hoping this was just one more stumbling block that could be surmounted with a few more lies, told Nations Bank that McAdams was only doing her job. She had sent the denial of his employment because of the top secret status of Project Star and because no secrecy agreement existed between Philip Morris and Nations Bank.
Reiners then sent a new fax, over the forged signature of McAdams, attesting to the phony explanation involving the so-called secrecy agreement.
Reiners next set up a conference call between himself, Nations Bank and Philip Morris officials. The call was supposed to assure bank officials of the validity of Reiners’ true employment status and top secret dealings. When the bank officials said they wanted to call back and speak directly to the Philip Morris officials in their offices, they were told that calls could only be placed through Reiners. Why? Because he had “scramblers” on all of the phones to assure the project’s secrecy.
The parties jointly agreed to a meeting, one at which they could deal face-to-face and be assured that Reiners was indeed the person he portrayed himself to be. With another $5.5 million expected within a few days, Reiners went for it.
The meeting took place in Rye Brook as scheduled. Present and accounted for were Reiners, McAdams, and representatives of Nations Bank and Signet. The part of McAdams, however, was being played by Bachiman.
The parts of the FBI investigators, who surprised Reiners in the midst of the meeting, were played by … FBI investigators.
The case is far from over. Signet is still owed $81 million and the others are still owed $173 million. Substantial recoveries are anticipated.
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