Men Involved in $4 Million CU Loan Scheme Face Sentencing

Michael Dicenzo, the former vice president of Greylock Federal Credit Union’s business banking, who authorized millions in business loans in exchange for kickbacks from a real estate developer, is scheduled to be sentenced in August.

And in October, the former real estate developer, Jeffrey Pierce, 51, of Pittsfield, Mass., will be sentenced in the $4 million loan fraud conspiracy.

Pierce pleaded guilty in U.S. District Court in Boston Wednesday to one count of conspiracy to receive money through transactions of a credit union with intent to defraud the $1.1 billion Greylock FCU in Pittsfield and to making false statements to a federal credit union.

Dicenzo, who had been working in the local banking industry dating back to the 1970s before he joined GFCU in 2004, pleaded guilty to fraud, making false statements to federal officials and tax fraud, in July 2014. Earlier sentencing hearings for the former credit union executive had been postponed.  A spokesperson for the U.S. Attorney’s office in Boston, said Dicenzo’s sentencing has been set for August 16.

From 2005 to 2008, Dicenzo authorized about $4 million in various loans and modifications for Pierce and his real estate companies by violating the credit union’s loan policies. Because Dicenzo circumvented GFCU’s policies, he provided Pierce and his companies with funds far in excess of what the real estate developer could reasonably receive or repay, according to federal court documents.

In exchange for funneling these loans to Pierce, he provided Dicenzo with $134,773 in kickbacks. The funds, which came from the GFCU loans, were paid to a front company created by Dicenzo. Pierce also provided the former credit union executive with the free use of a home constructed by one of Pierce’s companies and the free use of a BMW, which were purchased by one of Pierce’s companies with GFCU loans.

Dicenzo was fired in 2009, but he did not face felony charges until June 2014.

GFCU recovered approximately $545,000 in collateral from Pierce. GFCU’s insurer, Fidelity and Deposit Company of Maryland, paid GFCU’s claim of $2.9 million. However, the credit union lost an additional $877,725, according to court documents.