Judge hands down jail sentence

A Marlboro resident who is the former president of a Secaucus-based jewelry manufacturer was sentenced last week to 21 months in federal prison for conspiracy to make false statements to a bank which suffered a nearly $16 million loss due to the fraud, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Anne E. Thompson, sitting in Trenton, also ordered Allen Bloom, 47, formerly the president of Gold and Diamond Merchants of Secaucus, to pay $15.76 million in restitution to the bank he victimized.

On Sept. 27, Thompson sentenced Bloom's co-conspirator, Phillip Capraro, the CFO of Gold and Diamond Merchants, to 16 months in prison with the same restitution order as Bloom. Capraro pleaded guilty on June 24 to conspiracy to commit bank fraud. Gold and Diamond Merchants was a manufacturer of women's jewelry.

According to the U.S. Attorney, Bloom pleaded guilty before Thompson on Jan. 4 and admitted that he and others at his company were involved in making false statements to a unit of Fleet bank, which had made a line of credit available to Gold and Diamond Merchants that eventually exceeded $20 million.

On documents submitted to Fleet, Bloom said he and others overstated inventory and accounts receivable in order to increase the line of credit and to prevent the bank from declaring the line of credit in default.

Capraro, the company controller, admitted that he falsified account records and signed and submitted fraudulent borrowing base certificates, which overstated the collateral the company needed to support and extend its line of credit with Fleet bank, according to the U.S. Attorney.

In the summer of 2002, the bank discovered the fraud, and it eventually lost more than $16 million on the line of credit.