A former top lawyer at Webster Bank must pay the $2.5 million balance in fraud restitution by October 1, a federal judge ruled Thursday, finding that his assets are sufficient to satisfy the order.
U.S. District Judge Robert N. Chatigny rejected arguments from James Blose, the bank’s former general counsel, who claimed he would be unable to earn income while serving his four-year prison sentence and that his disbarment would permanently bar him from working in law or finance.
The judge noted that Blose’s bank accounts and securities holdings were enough to cover the remaining amount. However, Judge Chatigny allowed that if those assets fall short, restitution payments could be limited to $1,000 per month.
Fraud Scheme Traced Back to Side Deals
Blose pled guilty in December to one count of bank fraud and one count of engaging in illegal monetary transactions.
During sentencing, Blose admitted that he joined Hudson Valley Bank from private practice under an arrangement that allowed him to collect “side fees” by moving transactions through his personal lawyer trust account. But when Hudson Valley was absorbed by Sterling Bank and later Webster Bank, that practice was prohibited.
Despite the ban, prosecutors said, Blose continued funneling transactions and falsified business records to conceal the scheme.
