The former president of Ohio-based Premier Healthcare Management was sentenced to 42 months in prison, followed by three years on probation, for defrauding S&T Bank of more than $ 59 million.
The DOJ announced the sentencing of Harold Sosna, 68, on October 7. A financial restitution order for an as yet undetermined amount is expected to follow, according to the Pittsburgh Post Gazette.
“Harold Sosna was sentenced to a long prison term, which matches the scale of his fraud scheme… He defrauded community banks in western Pennsylvania and Ohio with an incredible amount – $ 59 million. Sosna is responsible for the biggest bank fraud scheme ever prosecuted in our district, ”Acting US attorney Stephen Kaufman said.
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The term “check kiting” originated in the 1920s and derives from the expression “flying a kite” which was used to refer to the practice of issuing loans that were not backed by collateral, to l except for the rarefied or hot air that kept them aloft. In practice, the check kit is a scheme in which the author writes bad checks between several accounts perpetuating a state in which deposits (for non-existent funds) are recorded as processing thus prompting the bank to authorize the withdrawal or transfer. of funds that were in fact never available. In essence, the perpetrator of this type of scheme surreptitiously obtains a loan without guarantee or consent from the bank to enter into such a transaction.
Under Sosna’s executive leadership since 1998, Premier Healthcare Management had nine nursing facilities in Ohio, each reporting to separate subsidiaries with separate bank accounts. As the Pittsburgh Post-Gazette reports, court documents show that in 2017 the Prime Minister’s financial situation grew increasingly desperate, and then ultimately ruinous after the start of the COVID-19 pandemic.
In an attempt at leniency, defense attorney Herbert Haas told the court that his client was unwilling to consider going into bankruptcy out of “love for the staff, the patients, his family and, frankly, his own pride and his ego ”.
According to the defense, unwilling to admit defeat and no longer able to support Premier’s operations with short-term payday loans, Sosna’s health deteriorated and he began to abuse alcohol.
Supposedly in a last act of desperation, over a three-day period in May, Sosna traded 203 checks through various subsidiary accounts, processing over $ 118 million in unfunded transactions between S&T Bank and First Financial Bank. , resulting in S&T Bank fraud of more than $ 59 million. . After the banks discovered some irregularities, Sosna surrendered and cooperated with investigators, which his lawyers say deserves consideration and leniency.
“Sir. Sosna has deep remorse for his conduct, and as his actions have demonstrated, he is dedicated to doing whatever it takes to right his crimes,” said attorney Haas.
Under federal law, bank fraud carries a prison sentence of up to 30 years.