Pittsburgh man accused of cheating banks

U.S. charges cash went for gambling, luxuries

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Joseph Graziano Jr. lived a life of fancy cars, expensive watches and casino tabs even though, investigators claim, he reported meager earnings, including just $7,104 in salary in 2011.

He did it, according to a 14-count indictment, by defrauding and embezzling millions of dollars from banks and thousands from individuals for about four years. On Tuesday Mr. Graziano, 28, of Downtown, pleaded not guilty to the charges.

"Mr. Graziano, these are very serious charges the government has lodged against you," said U.S. Magistrate Judge Maureen Kelly, warning him to abide by the conditions of his bond.

"There are boxes and boxes full of bank records in this case," said assistant U.S. attorney Tonya Sulia Goodman, who estimated that she might need three weeks to put on her case at trial.

From 2009 through 2011, while he worked as a corporate trust administrator for Bank of New York Mellon, Mr. Graziano shifted $2,441,294 from bank customers into accounts he controlled at another bank, according to the 64-page indictment.

Mr. Graziano persuaded other banks to lend him money, according to the charges, by leveraging fancy cars, fictitious bank balances and doctored tax returns.

For instance, according to the indictment, he borrowed against a 2010 Lamborghini Murcielago, valued at $495,000, after he had already sold the car to a dealer. He tricked banks into believing that he still owned the car by requesting and receiving a duplicate title after he had already sold it, according to the indictment.

He also took out overlapping loans against a 2006 Bentley Continental and a 2010 BMW X6, according to the indictment.

He showed one lender a balance statement indicating that he had $115,320, when that account held just $8.44, according to the indictment. He showed banks tax returns claiming earnings of about $614,000 in 2010 and $772,000 in 2011 from employment and management of a hedge fund firm he called Profinity, per the charges -- while he actually reported earnings of $33,262 in 2010 and just $7,104 in 2011.

The loans didn't last. He secured a $250,000 loan for Profinity and put it into a bank account, for instance, only to make no payments on the debt and draw the balance down to $35.78 in three months, investigators claim.

The borrowed money went to cover casino debts and fund E-Trade stock purchases and to buy luxury items, according to the indictment. Prosecutors want to seize a BMW X5, roughly $22,000, a Rolex Daytona Cosmograph wristwatch and an Audemars Piguet Royal Oak Offshore Black Dial wristwatch that they view as proceeds of the crimes.

In September, U.S. postal inspectors accused Mr. Graziano of selling people Apple iPads and MacBooks through eBay, but sending them only empty boxes. Users of the site ordered some two dozen items from him for $35,810 from June 19 through July 5, investigators wrote.

At the time, Mr. Graziano was working as a senior financial analyst at Education Management Corp, but he is no longer with EDMC.

Mr. Graziano's attorney, Marty Dietz, declined comment.

Rich Lord: rlord@post-gazette.com, 412-263-1542 or Twitter @richelord. First Published October 22, 2013 2:56 PM

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